Sanofi and Boehringer enter exclusive negotiations
An agreement is expected to be reached in the coming months.
European drugs giant Sanofi has entered into exclusive negotiations with Boehringer Ingelheim to secure a deal which would see the exchange of assets worth over 18 bn.
The proposed agreement would see Sanofi exchange its animal health business, Merial (worth €11.4 bn) and Boehringer Ingelheim Consumer Healthcare (worth €6.7 bn). The transaction would also include a gross cash payment from Boehringer Ingelhein to Sanofi of €4.7 bn.
The deal would allow Sanofi to become a world leader in consumer healthcare, with expected sales of approximately €5.1 bn in 2015. Boehringer Ingelheim would then become the second largest Animal Health company, whose sales are estimated to be around €1.6 bn for 2015.
Combining Merial and Boehringer would also create the second largest player in the global animal health market. The combined portfolios and technology platforms in anti-parasitics, vaccines and pharmaceutical specialities would place the combined company in the key growth segments of the industry.
Oliver Brandicourt, M.D and CEO of Sanofi, said: “In entering into exclusive negotiations with Boehringer Ingelheim, we have acted swiftly to meet one of the key strategic objectives of our roadmap 2020, namely to build competitive positions in areas where we can achieve leadership.
"This transaction would allow Sanofi to become a world leader in the attractive non-prescription medicines market and would bring a complementary portfolio with highly recognised brands, allowing for mid and long term value creation.
“I am confident that Boehringer Ingelheim will enable Merial to fully express and develop its potential in the attractive but competitive animal health market.”
Prof. Dr Andreas Barner, chairman of the board, Boehringer Ingelheim, added: "Boehringer Ingelheim’s strategic priority is to focus on the company’s core areas of expertise and businesses with an established global scale, or where a pathway to a global scale can be achieved and prioritized among Boehringer Ingelheim’s portfolio opportunities.
“Boehringer Ingelheim Animal Health is and will stay strongly committed to bringing novel, innovation driven solutions to veterinarians and animal owners. Our combined Animal Health business would be well positioned for growth and emergence as a leader globally. I am confident that Sanofi will enable our CHC business to fully live its potential supported by highly professional and committed teams.”
An agreement is expected to be reached in the coming months following consolations with relevant social bodies. Boehringer Ingelheim and Sanofi’s current goal is to close the potential transaction in the second half of 2016, subject to appropriate regulatory approvals.
Companies marketing medicines for small pets exempt from authorisation must submit their annual return to the Veterinary Medicines Directorate (VMD) by 30 November 2026.
