Asset swap to make drug firms stronger

By Ding Yining | June 28, 2016, Tuesday |

Online Edition

Sanofi and Germany’s Boehringer Ingelheim yesterday said they have agreed to a 22.8-billion-euro (US$25.1 billion) asset swap that would strengthen Boehringer Ingelheim's animal-health business while bolster the French drugmaker’s over-the-counter drug businesses.

Sanofi will trade its Merial animal-health business, valued at 11.4 billion euros, for Boehringer’s 6.7 billion-euro consumer-health operation. Boehringer will pay Sanofi 4.7 billion euros in cash to reflect the difference in value of the two businesses.

The strategic swap lays the foundation for both companies to reach size and scale in two highly attractive pharmaceutical activities.

The companies, which announced trade talks in December, have come to terms six months later and they aim to complete the transaction by the end of the year.

Combining Merial and Boehringer Ingelheim’s complementary portfolios and technology platforms in anti-parasitics, vaccines and pharmaceutical specialties would put the combined company into a more competitive position in the key growth segments of the industry and bring more value and innovation to customers globally. The Boehringer Ingelheim Animal Health business expects to more than double its sales to about 3.8 billion euros based upon 2015 global sales.

Hubertus von Baumbach, designated Chairman of the Board of Boehringer Ingelheim, stated, "This business exchange is attractive for both sides. Therefore, Boehringer Ingelheim and Sanofi are committed to drive these businesses successfully and sustainably in the future.”

Boehringer sees Merial’s addition to its lineup as “one of the most significant steps in our corporate history,” Chairman Andreas Barner said in a statement. “We will substantially enhance our position in the future market for Animal Health and will prospectively be one of the largest global players in this segment,” Barner said.

Sanofi’s new consumer health business will bring together its own Maalox and Lactacyd brands with Boehringer’s Dulcolax laxative and the cough medicine Mucosolvan. Boehringer’s business in China will be excluded from the transaction.

Business Ding Yining

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Asset swap to make drug firms stronger

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