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Sanofi, Boehringer Ingelheim mull business swap

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NEW YORK — Sanofi and Boehringer Ingelheim are in talks to swap their animal health and consumer health care businesses, respectively.

The companies said Tuesday that the proposed transaction would involve an exchange of Sanofi’s Merial animal health business (“Merial”), valued at €11.4 billion ($12.45 billion U.S.), and Boehringer Ingelheim’s consumer health care business,valued at €6.7 billion ($7.32 billion U.S.).

Olivier Brandicourt_Sanofi CEO

Olivier Brandicourt, Sanofi

The transaction, which excludes Boehringer Ingelheim’s China consumer health business, would also include a €4.7 billion ($5.13 billion U.S.) gross cash payment to Sanofi.

“In entering into exclusive negotiations with Boehringer Ingelheim, we have acted swiftly to meet one of the key strategic objectives of our road map 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 nonprescription medicines market and would bring a complementary portfolio with highly recognized brands, allowing for mid and longterm value creation,” stated Olivier Brandicourt, chief executive officer ofSanofi. “I am confident that Boehringer Ingelheim will enable Merial to fully express and develop its potential in the attractive but competitive animal health market.”

If a deal is struck, Sanofi would become the top global player in consumer health care, with expected pro forma sales of €5.1 billion ($5.57 billion U.S.) in 2015 and a worldwide market share of nearly 4.6%. By category, Sanofi would have the No. 1 position in digestive health and feminine care, No. 2 in pain care, No. 3 in allergy products and vitamins/minerals/supplements, and No. 6 in cough/cold, according to the company.

Sanofi said the addition of Boehringer Ingelheim’s consumer health business, which excluding China has estimated sales of €1.6 billion ($1.75 billion U.S.), would improve its position in Germany and Japan and give it access to iconic brands in antispasmodics, gastrointestinal, VMS and analgesics, as well as critical mass in cough and cold. In addition, the Sanofi consumer health business in the United States, Europe, Latin America and Eurasia would also expand significantly.

Leading brands in Boehringer Ingelheim’s consumer health business include the antispasmodic Buscopan, the laxative Dulcolax, Pharmaton multivitamins, the cough treatments Mucosolvan and Bisolvon, and the cold/sore throat treatment Mucoangin/Lysopaine. Sanofi’s consumer health brands include business are the allergy remedies Allegra and Nasacort; painkillers Doliprane, No-Spa and Dorflex; digestive products Essentiale, Enterogermina and Maalox; feminine care product Lactacyd; and vitamins, minerals and supplements Magné B6.

Meanwhile, the addition of Merial to Boehringer Ingelheim’s animal health business would create the second-largest global player in that market, with pro forma sales of about € 3.8 billion ($4.15 billion U.S.).

“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,” according to Boehringer Ingelheim chairman Andreas Barner. “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 consumer health care business to fully live its potential, supported by highly professional and committed teams.”

Sanofi and Boehringer Ingelheim said they’re aiming to close a potential transaction in the fourth quarter of 2016, subject to regulatory approvals.


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