Sanofi, Boehringer Ingelheim ink animal health-consumer healthcare business swap pact

France’s Sanofi has signed an agreement to swap its animal-health business (Merial) with Germany-based Boehringer Ingelheim’s consumer health (CHC) operation. The transaction, the discussion for which was initiated by the two companies in December 2015, will bolster the over-the-counter drugs and animal health businesses of Sanofi and Boehringer Ingelheim, respectively.  
 
Upon closing this transaction will be a significant business swap in the pharmaceutical sector and an important event in the history of both companies.
 
Prof Dr Andreas Barner, chairman of the board of Boehringer Ingelheim, stated, “As a research based pharmaceutical company, 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. The similarity in culture and approaches of BI and Sanofi will ensure that the businesses acquired by the other partner will develop well in the future.”
 
The strategic swap lays the foundation for both companies to reach size and scale in two highly attractive pharmaceutical activities. Upon successful completion, Boehringer Ingelheim’s CHC business - with an enterprise value of Euro 6.7 billion - would be transferred to Sanofi and Sanofi’s Merial - with an enterprise value of Euro 11.4 billion - would be transferred to Boehringer Ingelheim. In addition, Boehringer Ingelheim will pay Euro 4.7 billion in cash to Sanofi.
 
“In signing these contracts, we are meeting one of the key strategic goals of our roadmap 2020, namely to become a leader in consumer healthcare and a leading diversified global human healthcare company. This business swap will bring a complementary portfolio to our consumer healthcare activity with highly recognised brands, allowing for mid and long term value creation, and enhancement of our market penetration in some major countries,” said Olivier Brandicourt, chief executive officer, Sanofi.
 
  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. Boehringer Ingelheim’s animal health business would more than double its sales to approximately Euro 3.8 billion based upon 2015 global sales.
 
With this transaction, Sanofi would integrate Boehringer Ingelheim’s CHC business in all countries except China. Joint CHC sales would amount to approximately Euro 4.9 billion based upon 2015 global sales. Due to the addition of a highly complementary product and brand portfolio, Sanofi would enhance its position in several of its strategic categories - pain care, allergy solutions, cough & cold care, feminine care, digestive health and vitamins, minerals and supplements.