Belgium: Solvay to sell entire pharmaceutical business to US Abbott
Belgian chemical and pharmaceutical group Solvay said on Monday that it plans to sell its entire pharmaceutical business to US drug group Abbott for more than EUR 4.5 billion to focus on chemicals.
The deal, which could rise to EUR 5.2 billion (USD 7.6 billion) if add-on clauses are met, sees Abbott take over all Solvay's pharmaceuticals employees and assume liabilities including future exposure to litigation.
A statement said the deal, which Belgian press said amounted to "amputating" a division which delivered 50 percent of the group's 2009 first-half profits, was the result of "in-depth analysis and evaluation of the different strategic options" for the sector.
The deal is to be closed in the first quarter of 2010. Solvay said it would invest the proceeds in its original chemicals and plastics business, focusing on geographical expansion and attention to new products with a "low carbon footprint."
"The proceeds from the divestment will be reinvested in external and organic growth with a sharp focus on long term value creation," said chief executive Christian Jourquin.
Solvay's 2008 profits were slashed by almost half, which the group said in January was due to a fall in demand for its plastics and chemicals.
A round of consolidation has taken place throughout the pharmaceutical industry since Pfizer, already the world's biggest pharmaceutical firm, announced a USD 68 billion takeover of Wyeth in January.
This deal was followed by US giants Merck agreeing to buy rival Schering-Plough for USD 41.1 billion in March.