Boehringer, Sanofi prepping complex asset swap of consumer, animal health units
- Sanofi and Boehringer Ingelheim (BI) are discussing a $20 billion asset swap in which BI will swap its consumer health division for Sanofi's animal health business.
- While the deal is anticipated to be complex, all parties are confident the deal will close by Q4 2016.
- There is almost no overlap in the businesses slated to be merged. With fewer redundancies, workers are less likely to lose their jobs.
Acquisition of BI's consumer healthcare (CHC) division would give Sanofi a dominant position in that sector, with 2015 pro forma (post-merger) sales of $5.1 billion euros. Once complete, Sanofi would control 4.6% of the global CHC market. BI has been cautious during the ongoing M&A frenzy, but this deal represents an opportunity for the German group to become the second-largest animal health company worldwide.
Sanofi's animal health business has an enterprise value of 11.4 billion euros, while BI's CHC division's enterprise value measures 6.7 billion euros. BI would also pay Sanofi 4.7 billion euros in gross cash.
While there is always complexity involved with multi-billion dollar deals, this deal should be settled within a year.