Bristol-Myers Squibb looks to sell French OTC unit which could bring $1.8B

Add Bristol-Myers Squibb to the list of Big Pharmas doing consumer health reevaluations these days. After announcing a review last month, the U.S. drugmaker is looking to sell its French consumer health business, Upsa, according to Reuters.

With core earnings of about €100 million, the unit could worth up to €1.5 billion ($1.8 billion), according to one of several unnamed sources cited by Reuters. BMS has hired Deutsche Bank and Jefferies to help it find a buyer, and will start the bidding process after the summer, the news wire reported.

"No decisions on the future of Upsa business have been made," said a BMS spokeswoman in a statement sent to the Journalist.

BMS first announced a strategic review of Upsa last month. In a release on June 19, BMS said it was considering several options, including a potential sale, but added that it may also decide to retain and grow the business. The spokeswoman confirmed that the evaluation is expected to finish by the end of 2018.

Now, several European generics and over-the-counter players—some of which have just changed hands themselves—could scoop up the unit to beef up their own offerings, according to Reuters’ sources. These include German generics drugmaker Stada, which was taken over by private equity firms Bain Capital and Cinven last September, and Zentiva, which Sanofi just recently sold off to Advent for €1.9 billion.

Italy’s rare disease pharma Recordati, which just agreed to sell a controlling stake to private equity firm CVC Capital Partners for about $3.5 billion, plus U.S. firms Mylan and Procter & Gamble, could all put up their bids for the business, sources told Reuters.

The French unit, acquired by BMS in 1994, sells such drugs as analgesic products Dafalgan and Efferalgan, cold and flu drug Pervex and vitamin C, among others. It turned in €425 million last year and employs nearly 1,600 people, according to its official website. That makes a potential buyout valued at up to €1.5 billion, one of the sources told Reuters.

France is the company’s major source of revenue, taking up 52% of the total, and its footprints also cover other parts of Europe, Africa and Southeast Asia.

"Upsa is a successful and valuable business, leader in a variety of consumer health segments in which it operates across 60 markets, mainly in Europe, on which BMS wants to maximize growth potential," said BMS in its June release.

BMS’ move is the latest in the industry’s consumer health shakeup. In April, Merck KGaA finalized a €3.4 billion ($4.2 billion) deal to sell its consumer health business to P&G. Earlier in March, Novartis handed all its stake in an OTC joint venture with GlaxoSmithKline to the British pharma for £9.2 billion ($13 billion). Pfizer was still looking to divest its consumer health sector in April, although its chances at reaching a deal seemed gloomy.

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