Crucell NV |CRXL
Johnson & Johnson |JNJ

Deal value $2.8 billion

Spread 11/08/10 $2.13, or 6.6%

The Johnson & Johnson acquisition of Dutch biopharmaceutical company Crucell NV for $2.8 billion has hit a rough patch over the target's production of a key vaccine that drives revenue.

J&J and Crucell announced their merger Oct. 6, following a Sept. 28 agreement to form a joint venture to develop monoclonal antibodies and vaccines to treat influenza. With the JV, J&J took a 17.9% stake in Crucell for €302 million ($417 million).

Crucell subsequently put a temporary hold on shipments of its liquid pentavalent vaccine Quinvaxem, which protects infants against five childhood diseases, and its Hepavax-Gene vaccine for hepatitis B.

These vaccines have been produced in a facility in Shingal, South Korea, where sterility has been compromised.

Quinvaxem has been a financially important product for Crucell. In August, the company said it received a contract from Unicef worth $110 million for the vaccine, bringing total orders for delivery between 2010 and 2012 to $410 million. Crucell had total 2009 revenue of about $600 million. The vaccine holds a market share of more than 50%.

The manufacturing facility in question is scheduled to be shut down in 2011 after a new facility in Incheon, South Korea, comes on line.

J&J says it is working with Crucell to understand the circumstances surrounding these events.

ResCare Inc. |RSCR
Onex Corp. |OCX.T

Deal value $390 million

Spread 11/08/10 14 cents, or 1.1%

ResCare Inc. received a subpoena from the U.S. Department of Justice regarding potential violations of the False Claims Act as its buyout by Canadian private equity firm Onex Corp. awaits its final approval.

The $390 million deal for the in-home rehabilitation, therapy and job-training provider requires a pass by the West Virginia Health Care Authority.

ResCare disclosed in a Nov. 5 10-Q that on Sept. 24 it received a civil investigative demand from the DOJ regarding a possible violation of the FCA. ResCare said it is in the process of evaluating the scope of the CID and its response.

Onex, which entered the buyout Sept. 7, owns 12.5% of ResCare shares and has convertible preferred shares that would raise that holding to 24.9% if exercised. Onex also sits on the ResCare board.

Potash Corp. |POT
BHP Billiton Ltd. |BHP

Deal value $38.7 billion

Spread 11/08/10 -10.84, or -7.7%

BHP Billiton Ltd.'s $39 billion takeover attempt of Canadian fertilizer company Potash Corp. is presumed dead, interred by Canadian politics, but BHP does have until early December to revise its attempt to get the mining deal done.

Little expectation exists for that outcome. A source close to BHP says that the hurdle set by Industry Canada to gain approval for the deal seems too high.

Opposition to the transaction began at the provincial government of Saskatchewan, where the bulk of Potash's reserves lie. The federal government backed that stance and objected to the takeover as it has been proposed.

While that allows room for BHP to offer more concessions, Potash's rejection of the current price and the likelihood that further concessions would cut into the economics of the deal point to no deal at all.