Abbott to acquire Solvay

28-Sep-2009

Global healthcare company Abbott is to buy the pharmaceutical business of Belgian chemical and pharmaceutical group Solvay for Euro 5.2bn (US$7.6bn).

Global healthcare company Abbott is to buy the pharmaceutical business of Belgian chemical and pharmaceutical group Solvay for Euro 5.2bn (US$7.6bn).

The transaction gives US-based Abbott a complementary portfolio of pharmaceutical products, a significant presence in Eastern Europe and Asia, and full global rights to the cholesterol drug fenofibrate. Abbott currently has US rights to fenofibrate and pays royalties to Solvay.

The deal includes a purchase price of b4.5bn (US$6.6bn) in cash and additional payments of up to b300m (US$439m) if certain milestones are met between 2011 and 2013. It also includes the assumption of certain liabilities, valued at approximately b400m.

Abbott says the acquisition will add more than US$3bn (US$4.4bn) in annual sales, the majority outside the US, and US$500m (US$732m) to Abbott's annual r&d investment in pharmaceuticals.

Solvay Pharmaceuticals employs 9,000 people worldwide. The transaction is expected to be closed in the first quarter of 2010.

The company's pharmaceutical portfolio complements Abbott's presence in specialist areas such as cardiovascular disease, neuroscience and gastroenterology. Solvay has treatments for Parkinson's disease, MeniEre's disease, vertigo and irritable bowel syndrome in addition to products for male and female hormonal health.

The acquisition also includes Solvay's vaccines business. The company has a small molecular diagnostics unit that will become part of Abbott's diagnostics organisation.

"Abbott's international pharmaceutical business has grown significantly over the past several years, driven by specialist products in developed markets," said Olivier Bohuon, executive vice president, pharmaceutical products group at 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."

After closing the transaction, Solvay says it will reinvest the proceeds in "high value-added activities and strategic projects in chemicals and plastics".

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"We are building a new refocused group with the financial means to further accelerate sustainable growth,' said Aloïs Michielsen, Solvay's chairman.

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