Eli Lilly to buy ImClone for $6.5 bn

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ImClone Systems Inc has agreed to be acquired by Eli Lilly and Co for about $6.5 billion, after rejecting a sweetened bid from Bristol-Myers Squibb Co, the companies said on Monday.

The all-cash agreement values ImClone, which makes the cancer drug Erbitux, at $70 per share, a premium of 51 per cent to ImClone's closing share price on July 30, the day before Bristol-Myers made an offer of $60 a share. ImClone's shares closed on Friday at $64.96.

Lilly said it will incur a one-time charge to its earnings, but it is premature to say what that charge will be. Lilly expects the transaction to be accretive to earnings on a cash basis in 2012 and on the basis of net income in 2013.

The deal is not subject to any financing condition and is expected to close in either the fourth quarter of 2008 or the first quarter of 2009.

Bristol-Myers, which recently raised its initial offer to $62 a share, declined to comment.