BMS hires banks for 1 billion euro-plus sale of French OTC drug unit - sources

Zentiva SA

05/07/2018 15:39

By Ben Martin, Pamela Barbaglia and Arno Schuetze
    LONDON, July 5 (Reuters) - U.S. pharmaceuticals giant
Bristol-Myers Squibb  BMY.N  has hired two banks to find a buyer
for its French over-the-counter (OTC) drugs business, which
could be valued at more than 1 billion euros in a potential
deal, sources familiar with the matter told Reuters.
    Deutsche Bank and Jefferies are preparing the maker of
Dafalgan and Efferalgan painkillers for an auction process which
will kick off after the summer, the sources said. 
    The unit generated revenue of 425 million euros in 2017. It
has core earnings of about 100 million euros and could fetch up
to 1.5 billion euros ($1.8 billion), one of the sources said,
pointing to high sector valuations.
    It comes after BMS said last month it would carry out a
strategic review of its French consumer health business, called
Upsa, which employs about 1,500 people in the country. The U.S.
firm took full control of the unit, which also produces
effervescent aspirin and vitamin C, 24 years ago.
    BMS declined to comment beyond its June statement. Deutsche
Bank and Jefferies declined to comment.
    The planned sale reflects a trend by big drugmakers to focus
on their strongest areas and BMS has already taken similar steps
to offload non-core assets as it concentrates on high-margin
prescription drugs, particularly for cancer.
    The potential sale of Upsa follows a series of high profile
deals in the consumer health industry including Procter &
Gamble's acquisition of Merck KGaA's vitamin brands and
GlaxoSmithKline's  GSK.L  move to buy Novartis out of their
consumer healthcare joint venture for $13 billion in March.
    BMS' French business is expected to draw interest from a
series of European private equity-backed companies which are
looking to scale up their existing portfolio companies, the
sources said.
    The bidding field is expected to include German generics
drug firm Stada  STAGn.DE , which is held by buyout funds Bain
and Cinven, and France's Zentiva  ROSCD.BX , which was sold to
private equity firm Advent earlier this year, the sources said.
    Italy's Recordati  RECI.MI , which recently entered an
agreement to sell a majority stake to CVC, may also decide to
join the fray, they said.
    U.S. drug firms including Mylan  MYL.O  and Procter & Gamble
 PG.N  are also expected to bid for the BMS unit, whose product
portfolio includes cold and flu drug Fervex, they said.
    The prospective bidders have yet to be given access to
confidential information, one of the sources said.
    Stada, Zentiva's owner Advent and P&G declined to comment
while Recordati's backer CVC and Mylan were not immediately
available for comment.
    BMS's recent divestments include the 2013 rights sale to
Reckitt Benckiser  RB.L  of a range of over-the-counter products
sold in parts of Latin America while in 2005 Novartis  NOVN.S 
bought certain BMS products in the United States for $660
million.
    BMS has previously taken steps to divest other non-core
businesses, including the spin-off of its baby food unit Mead
Johnson Nutrition in 2009.
($1 = 0.8543 euros)

 (Additional reporting by Ben Hirschler; editing by David Evans)
 ((ben.martin@thomsonreuters.com; +44 207 542 7254; Reuters
Messaging: ben.martin.thomsonreuters.com@reuters.net))