Syracuse, N.Y. -- South Korean conglomerate Lotte has agreed to purchase Bristol Myers Squibb’s pharmaceutical plant in East Syracuse and make it the company’s North America center for biologics contract development and manufacturing.
The companies said Friday they anticipate completing the transaction by the second half of 2022, subject to regulatory approvals and the satisfaction of other closing conditions.
They did not disclose the purchase price in their announcement early Friday morning, but Yonhap News Agency reported that Lotte will pay $160 million for the plant and said the deal includes contract manufacturing agreements to produce medicine worth $220 million for Bristol over the next three years.
The more than 400 Bristol workers at the Thompson Road facility will become employees of Lotte Corp. when the acquisition is completed.
Lotte said it will acquire the East Syracuse site’s operations and assets, which include the property, plant and equipment, as well as a workforce with technical capabilities and expertise.
Following the closing of the transaction, Lotte will manufacture product for Bristol from the East Syracuse facility. Lotte said it expects over time to use the facility to expand its contract development and manufacturing operations for the biopharma industry.
“The East Syracuse site has been an important part of our company’s history and our manufacturing network for many decades, and we are confident that Lotte will fully leverage the facility, its capabilities and its experienced workforce as it continues to play a vital role for patients around the world,” said Karin Shanahan, executive vice president, Global Product Development and Supply, for Bristol.
“We have taken a thoughtful approach to this decision and are confident this will best support the continued evolution of our manufacturing network and our mission to deliver innovative medicines that help patients prevail over serious diseases.”
“We are pleased to add this state-of-the-art facility to our global pharma operations, which will enable us to rapidly scale and expand our biologics CDMO business in North America,” said Lotte Executive Vice President Hunki Lee. “We look forward to welcoming the talented team in East Syracuse to Lotte, and we intend to make significant investments to further enhance the facility and its capabilities to support our strategic growth objectives moving forward.”
The East Syracuse site will continue to operate as part of Bristol Myers Squibb’s manufacturing network until the closing of the transaction.
The Bristol Myers Squibb plant in East Syracuse was established in 1943 to answer the U.S. government’s call for large scale production of penicillin. In recent years, the plant has focused on the development of biologics, which are drugs made from plant or animal cells. (Bristol Myers Squibb)
William Blair is serving as financial advisor to Bristol Myers Squibb, and Baker McKenzie is serving as legal counsel to Bristol Myers Squibb in the transaction.
The facility has a long history in East Syracuse. The site was originally established in 1943 to answer the U.S. government’s call for large scale production of penicillin. At its height, the plant produced up to 70% of the penicillin made in the United States and employed more than 2,000 people.
Bristol phased out penicillin production at the plant in 2004. The facility now focuses on the development of biologics — drugs made from plant or animal cells. It also makes small amounts of drugs for clinical trials and researches ways to mass-produce biopharmaceuticals.
Many of the jobs at the plant are held by biochemists, molecular biologists and engineers.
Bristol is headquartered in New York City and employs more than 30,000 worldwide.
Lotte Corp. is a holding company of Lotte Group, based in Seoul, South Korea. Lotte Group was established in 1967 and has since grown to become South Korea’s fifth-biggest conglomerate, encompassing four key business areas, including food and beverage; retail; chemical; and hotels, with more than 90 affiliates.
Lotte is in over 30 countries around the world. It is well known for its skyscraper, Lotte World Tower, the tallest building in South Korea and the seventh tallest in the world.
Rick Moriarty covers business news and consumer issues. Got a tip, comment or story idea? Contact him anytime: Email | Twitter | Facebook | 315-470-3148