ftc decision, page-2

CSL (CSLKZG) – Deal or no deal
CSL’s proposed $3.1 billion acquisition of rival Talecris faces a serious threat from the Federal Trade Commission (FTC),
which is concerned about competition in the U.S. Lawyers at the FTC have told the companies that the agency is
preparing to sue to block the deal as proposed, which seeks to combine two of the largest five companies providing
plasma protein products in a $15 billion global market.
We believe CSL wouldn’t be surprised if they had to divest some plasma centres to get the deal through. RBS Research
have calculated, CSL would have 33% of the US plasma collection centre market after this acquisition. CSL may have to
divest c10 centres out of a total of c120 centres which would be marginal to earnings.
We saw market sentiment hit the stock badly on Thursday, closing down 4.7% to $31.91. RBS Research maintain a
target price of $47.05 if the Talecris deal is approved, which we feel will happen in one form or another. The target price
if the deal was block would be c$37 and still represent significant upside in our #1 healthcare pick.
Get long CSL during the pullback with CSLKZG.
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