Sanofi, Boehringer Ingelheim Agree to $25 Billion Asset Swap

Sanofi agreed to a 22.8 billion-euro ($25.1 billion) asset swap with Germany’s Boehringer Ingelheim GmbH that will bolster the French drugmaker’s business in selling over-the-counter drugs.

The companies reached a definitive agreement after announcing exclusive negotiations in December, they said in a statement. The terms are unchanged from the original announcement: Sanofi will trade its Merial animal health business, valued at 11.4 billion euros, for Boehringer’s 6.7 billion-euro consumer-health operation. Closely held Boehringer will also pay Sanofi 4.7 billion euros in cash.

The deal helps Chief Executive Officer Olivier Brandicourt reshape Sanofi, whose pharmaceuticals division has grappled with declining sales of its best-selling insulin. It also adds to the consolidation in consumer health. GlaxoSmithKline Plc and Novartis AG created a joint venture in 2015, while Bayer AG in 2014 acquired Merck & Co.’s over-the-counter business.

The companies aim to complete the transaction by the end of the year. Sanofi will use part of the proceeds to buy back shares, and it expects the deal to be neutral for earnings next year and add to profit after that, the company said.

Not in China

Sanofi shares were little changed, trading at 69.44 euros in Paris. The stock has slumped 22 percent over the past year, including dividends, compared with a 14 percent drop in the Bloomberg Europe Pharmaceutical Index.

The Paris-based drugmaker is now also in pursuit of Medivation Inc., the biotechnology company that sells the prostate cancer drug Xtandi. Brandicourt, who joined last year, has said the company is also exploring options for disposing of its generics business in Europe, due to the increasing complexity of the business.

Sanofi’s new consumer health business will bring together its own Maalox and Lactacyd brands with Boehringer’s Dulcolax laxative and the cough medicine Mucosolvan. Boehringer’s business in China will be excluded from the transaction.