Abbott buys Solvay for $6.6 billion
pharmafile | September 28, 2009 | News story | Sales and Marketing | Abbott, Solvay, cystic fibrosis
Abbott is to buy the pharma division of Belgium-based Solvay for 4.5 billion euros ($6.6 billion) in cash.
Solvay declared in April that it was ready to accept bids for its pharmaceuticals business, leaving it to focus on its chemicals and plastics businesses.
The agreement brings to an end a bidding war between numerous companies looking to add the Solvay division to their portfolio, including Nycomed and fellow Belgian pharma company UCB.
The acquisition makes sense for Abbott as it already holds the US marketing rights for Solvay’s fenofibrate franchise, its biggest selling products. This includes a ‘next generation’ fenofibrate TriLipix which the companies launched together in late 2008.
Last year Solvay’s pharma division earned annual sales of 2.69 billion euros in 2008, and its presence in vaccines and emerging markets is also attractive to Abbott.
Solvay will also add around $500 million to Abbott’s annual R&D spending, which the company says will help it maintain growth.
“The acquisition of Solvay Pharmaceuticals further diversifies our pharmaceutical portfolio, expands our presence in key high-growth emerging markets, enhances our investment in R&D and accelerates our long-term earnings-per-share growth outlook,” said Miles White, Abbott’s chairman and chief executive.
Solvay has significant presence and infrastructure in key high-growth emerging markets, including Eastern Europe and Asia, which are key markets for pharma growth. Emerging markets represented about 20% of the company’s pharma sales in 2008.
“In anticipation of future market needs, we are ensuring we have the technologies, products, infrastructure and reach to serve patients globally and continue to deliver sustainable industry-leading growth. This acquisition, as well as the others we’ve announced this year all contribute to achieving that long-term goal,” said Mr White.
“With this transaction Solvay Pharmaceuticals has found a new strong home, within a respected company with a solid and committed position in the industry,” said Christian Jourquin, Solvay’s chief executive.
Solvay’s pharmaceutical portfolio complements Abbott’s presence and expertise in specialty markets such as cardiovascular disease, neuroscience and gastroenterology. Solvay has treatments for Parkinson’s disease, Meniere’s disease (abnormality of the inner ear), vertigo, and irritable bowel syndrome. Solvay also offers products to treat men’s and women’s hormonal health, and exocrine pancreatic insufficiency (inability to properly digest food), which is associated with several underlying conditions including cystic fibrosis and chronic pancreatitis.
Solvay’s vaccines division will provide Abbott entry into the expanding global vaccines market, although its share of the global market is much smaller than rivals such as GSK and Sanofi-Pasteur MSD.
Solvay has a small molecular diagnostics unit that will be merged into Abbott’s own diagnostics division.
“Abbott’s international pharmaceutical business has grown significantly over the past several years, driven by specialty products in developed markets,” said Olivier Bohuon, executive vice president, Pharmaceutical Products Group, Abbott.
“In emerging markets where chronic disease is being treated more aggressively, the combined Abbott and Solvay portfolio of branded generics expands the global reach of these medicines. Solvay’s business will also give us a platform to enter the attractive global vaccines market,” he added.
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