Private equity eyes drug brands purchase
Older drug brands from GlaxoSmithKline and Sanofi among those being targeted
GlaxoSmithKline said last week it had received “very significant” indicative bids from private equity companies. Photographer: Chris Ratcliffe/Bloomberg
Private equity groups are exploring a $10 billion (€7.4 billion) plan to buy hundreds of older drug brands from GlaxoSmithKline (GSK) and Sanofi and merge them, highlighting the continued intense deal activity sweeping the pharmaceuticals sector.
KKR and Warburg Pincus are among those weighing bids for the GSK and Sanofi assets – and looking at a possible combination of the two portfolios, according to several people familiar with the matter. KKR and Warburg Pincus declined to comment.
GSK said last week it had received “very significant” indicative bids from private equity companies and midsized drugmakers in a portfolio of mature products with annual sales of about €1.25 billion.
Sanofi, meanwhile, is considering the sale of about 200 older drugs with annual revenues of at least €2.1 billion. Those assets alone have an enterprise value of €6.3 billion, according to internal Sanofi documents leaked by a labour union last month.
The concept of rolling the two sets of assets together is still at an early stage as Sanofi is yet to make a firm decision on what to do with its portfolio.
However, work is being done by potential bidders on a potential combination, those people added.
Mylan of the US and Lupin of India are among potential trade buyers to have been linked with one or both of the GSK and Sanofi businesses. Mylan this month struck a $5.3 billion (€3.9 billion) deal to buy a portfolio of generic drugs from Abbott Laboratories.