Posted on June 29, 2009 at 3:29 PM
Filed under: Acquisitions | Corporate Strategy | Deal International | Growth Strategy | Joint Ventures and Alliances | Middle market | Sector Watch | Trends
Tagged: Bayer , Eli Lilly , FCCB , Merial , Novartis , Pfizer , Provimi , Sanofi , Vétoquinol , Virbac , Wockhardt , Wyeth

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In a broader effort to focus on its human pharmaceutical business and raise cash (as well as investor confidence), Indian generic drug maker Wockhardt Ltd. is selling its animal health division to France's Vétoquinol. The deal marks Vétoquinol's entrance into India. Earlier this month, Wockhardt sold its German business Esparma to Mova GmbH and received shareholder approval to sell its veterinary business for not less than 1.5 billion rupees ($31 million). The vet biz had net sales of Rs770 million last year. More businesses are expected to be divested.

A Wall Street Journal report said Wockhardt's debt includes foreign currency convertible bonds, or FCCB, of $109 million, which are due for redemption in September. The report also said the pharma company is looking at stake sales in its biotechnology business and in Wockhardt Hospitals Ltd., a hospital chain run by the company's founders.

The small animal healthcare deal is part of a bigger trend in pharma dealmaking. Pfizer Inc. (NYSE:PFE), which recently acquired RFCL Ltd.'s Vetnex Animal Health division, was actually looking to acquire Wockhardt's vet business as well.

The Deal Pipeline shows (subscription required) that while French pharma company Virbac SA may have satisfied its growth goals in India with its 2006 acquisition of GlaxoSmithKline plc's (NYSE:GSK) Indian veterinary business, Virbac is still looking for acquisitions in Asia, South America, and Northern and Eastern Europe. Provimi SA is also looking for buyers for its Indian animal health division Tetragon Chemie Pvt. Ltd. The Deal Pipeline notes Pfizer and Sanofi-Aventis SA (NYSE:SNY) could buy it and that Eli Lilly and Co. (NYSE:LLY), Novartis AG (NYSE:NVS) and Bayer AG could buy Schering-Plough Corp.'s (NYSE:SGP) animal health biz, Intervet.

And then there's Merial Ltd., the 50-50 animal health JV between Merck & Co. (NYSE:MRK) and Sanofi. Merck may sell its stake to Sanofi or someone else.

Companies are attracted to the animal health sector because it faces less generic competition. - Baz Hiralal

See the WSJ story on Wockhardt



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