Company agrees to acquire Eli Lilly lab

LAFAYETTE, Ind. (WLFI) - Evonik Industries Inc., a company based in Germany, has agreed to acquire Eli Lilly's Tippecanoe Laboratories.

The location currently employs around 700 people. Eli Lilly's Vice President of Communications Angela Sekston said that all 700 full-time employees at Tippecanoe Laboratories will receive a job offer from the new owner. 

These employees will also receive a severance package from Lilly, whether or not they accept the positions with Evonik. Lilly said that it expects to spend $85 million next year on severance payments.

Evonik Spokesperson Tom Bates said that retaining the current employees was important to Evonik.

"The employees are an absolute key part of this, because they have the knowledge, the skill. It's a very technically challenging operation," said Bates. "The employees are critical. We're making offers to all the employees at equivalent salary and with benefits that we think are comparable to what Lilly offers."

Lilly’s chairman and chief executive officer, John Lechleiter, expressed his satisfaction with the deal.

“Today's announcement represents a positive outcome for employees at the site, the Lafayette community, and Lilly,” said Lechleiter. “Evonik is a well-established multinational company with a strong track record in producing high-quality products.”

Last July, Lilly announced that it was considering three alternatives for the location; it would either be restructured, sold, or closed.

Executives at Lilly are calling this the best of the possible options. In addition to acquiring the site, Evonik plans to enter a multi-year supplier agreement with Lilly.

Dr. Hans Josef Ritzert, the head of one of Evonik's business lines, said that Evonik will be producing pharmaceutical ingredients for Lilly and other companies.

Lilly's Senior Vice-President of Corporate Affairs Bart Peterson said that Lilly felt that selling the site was the best decision because of concerns that the company would be under-utilizing it in the future. Some Lilly drugs will leave patent protection in the next few years. Peterson said that with the supplier agreement, the facility will continue its role in producing these drugs for Lilly, but will also be able to develop new products under Evonik's leadership.

The purchase price of the deal was not disclosed. The transaction is expected to close by the end of 2009, pending approvals from regulatory agencies.

Related resources:

Evonik Facts & Figures (PDF)

Evonik Company Description (PDF)

Lilly's Tippecanoe Laboratories web site

Share this story on Facebook.