Lonza Group AG (LONN.VX) Monday said its acquisition of U.S. biocides maker Arch Chemicals Inc. (ARJ) would proceed as planned despite a U.S. investigation into three Swiss investment firms linked to alleged insider trading ahead of the $1.2 billion deal.

The U.S. Securities and Exchange Commission Monday filed a civil lawsuit in the federal court in Manhattan alleging improper trades ahead of a transaction by Geneva-based investment firms Coudree Capital Gestion SA and Compania Internacional Financiera SA--both owned by Turkish trader Yomi Rodrig--and Chartwell Asset Management.

"The SEC investigation doesn't affect Lonza," a spokesman for Lonza said, adding that the investigation wouldn't derail the deal, which is vital for Lonza to broaden its product portfolio outside its core pharma business. He said the SEC hadn't asked for Lonza's support but that if it were to do so, "we will cooperate with any regulatory authorities."

A spokeswoman for Coudree said the company was aware of the lawsuit, but declined to make any further comment. Compania Internacional couldn't be reached and Chartwell declined to comment. A spokesman for Arch Chemicals couldn't be reached.

When Lonza announced the takeover of Arch Chemicals, it offered a premium of more than 30% to Arch Chemicals' average share price for 30 days prior to the announcement of the deal. However, just days before the deal was announced July 11, shares of Arch Chemicals surged, rising more than 14% July 8.

Lonza Chief Executive Stefan Borgas had said that no rumors of the deal had been in the market. He said the deal had been facilitated by the Swiss franc's strength. Lonza declined to make CEO Borgas available for comment.

Dealers said that while it was unlikely that the takeover could be put into doubt, shares of Lonza shed more than 2% Monday, while shares of Arch Chemicals traded down about 1% at $47.25 in midday trading in New York. Lonza has recently launched a tender offer to acquire the outstanding Arch Chemicals shares for $47.20 per share.

Rodrig couldn't be reached for comment. In 2005, he settled with the SEC over short selling allegations, paying a fine worth more than $6 million. He had denied any wrongdoing.

After the announcement of Lonza's takeover deal, several U.S. law firms said they were ready to launch lawsuits against Arch Chemicals as they believed that Lonza's takeover offer for the U.S. company was too low.

-By Goran Mijuk, Dow Jones Newswires; +41 43 443 80 47; goran.mijuk@dowjones.com

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