LAKE FOREST — The CEO of Akorn Pharmaceuticals is stepping down after Delaware's highest court affirmed a ruling that the German healthcare company Fresenius Kabi is allowed to back out of a $4.3 billion merger agreement.
Akorn, which has two facilities and more than 300 employees in Decatur, had asked a Delaware Chancery Court to force Fresenius to continue with the 2017 deal. Fresenius earlier this year said it wanted to back out, citing alleged breaches of data integrity requirements.
The lower court ruled in October that Fresenius could terminate the agreement, and the appellate court last week agreed.
In a statement, the company described the high court's ruling as "disappointing."
CEO Raj Rai has decided to retire, but will remain in his role until the company's board of directors hires a new chief executive, the company said in a statement.
“We recognize that this has been an extended period of uncertainty for Akorn’s customers, employees and investors and the Board is committed to ensuring the company’s stability and long-term growth,” said Board Chairman Alan Weinstein. “While there is work to do, Akorn’s future remains bright thanks to its manufacturing, quality and generics expertise and is not dependent upon a consummated transaction with Fresenius."
In the October ruling, J. Travis Laster, a judge for the Delaware Chancery court, wrote that Fresenius was allowed to terminate the merger agreement, in part "because Akorn's representations regarding its compliance with regulatory requirements were not true and correct" and because of the "magnitude of the inaccuracies."
Akorn in October celebrated the $25 million expansion of its Decatur facility at 1222 W. Grand Ave., which includes a new lab and pilot plant. Last year, Akorn opened a 30,000-square-foot expansion to its packaging facility on Wyckles Road.