Sanofi and Boehringer Ingelheim in Business-Swap Agreement

Sanofi and Boehringer Ingelheim (BI) have entered into exclusive negotiations to swap businesses.

The proposed transaction would consist of an exchange of Sanofi animal health business (Merial), with an enterprise value of $12.5 bn, and BI's consumer healthcare (CHC) business, with an enterprise value of $7.4 bn. BI's CHC business in China would be excluded from the transaction. The transaction would also include a gross cash payment from BI to Sanofi of $5.2 bn.

The transaction reportedly allows Sanofi to become the number one ranked player in CHC with expected pro forma sales of approximately $5.6 bn in 2015 and a global market share close to 4.6%. Sales of BI CHC business (excluding China) are estimated at about €1.6 bn for 2015 and are said to be "highly complementary" with those of Sanofi CHC, both in terms of products and geographies. 

Germany would become a key center of Sanofi CHC business, including in particular for gastro-intestinal and cough & cold categories, while Lyon, France, would be a key operational center of BI's Animal Health business. BI aims to maintain business operations, R&D, and manufacturing centers in France and will "pay particular attention to sustain the momentum of the U.S. operations".