Solvay buys France's Fournier Pharma

24th March 2005, Comments 0 comments

PARIS, March 24 (AFP) - Belgian chemical and pharmaceutical group Solvay said on Thursday it was buying French laboratory Fournier Pharma for 1.3 billion euros (USD 1.69 billion) in a "major strategic decision" in the field of cardio-metabolic research and treatments.

PARIS, March 24 (AFP) - Belgian chemical and pharmaceutical group Solvay said on Thursday it was buying French laboratory Fournier Pharma for 1.3 billion euros (USD 1.69 billion) in a "major strategic decision" in the field of cardio-metabolic research and treatments.

Solvay said that it expected the takeover to raise recurrent operating profit by 58 percent, sales by 34 percent and net earnings per share by 7.3 percent.

The total cost of the acquisition would be EUR 1.3-1.6 billion. The initial price agreed was EUR 1.3 million in cash but extra payments of up to EUR 300 million might be made depending on specific phases.

Solvay said it aimed to achieve a recurrent operating profit equivalent to 15 percent of sales and to spend the equivalent of 15 percent of sales on research and development while holding the return on investment above 20 percent.

Solvay also wanted to strengthen its position in the United States.

In general, it was convinced that the deal amounted a "a very good opportunity".

Fournier Pharma would bring with it a strong line of products for controlling cholesterol to join its own cardiology research effort. These cardio-metabolic activities would become the mainstay of Solvay's pharmaceutical activities.

The purpose of the acquisition was to accelerate lasting and profitable growth, the company said.

Fournier Pharma, the fourth-biggest independent French laboratory, is 80-percent owned by the Le Lous family and the rest of the stock is held by people close to the family.

Fournier, which has been restructured several times, is focused totally on prescription drugs and is experiencing strong growth around the world owing to an alliance with Abbott Laboratories on its leading anti-cholesterol treatment, TriCor. Sales of this in the Americas surged by 38 percent last year to USD 779 million (EUR 599 million) and are expected to exceed USD 1 billion (EUR 769 million) this year.

Company president Herve Le Lous said that the deal would create "a player with world ambitions in the field of cardio-metabolic diseases", was in line with company strategy and would strengthen the development of new products and expansion abroad.

Solvay said that its sales would increase by more than a third as a result of the acquisition, that group profitability would rise immediately, and that the potential for improvement of performance was significant.

The new entity would have an annual budget for research and development of 370 million euros on current figures, which Solvay said was "substantial".

Solvay Pharmaceuticals employs 8,000 people throughout the world and is a subsidiary of the Solvay group, which is based in Brussels.

The whole group employs about 30,000 people in 50 countries and in 2004 achieved sales of EUR 7.9 billion from chemicals, plastic and pharmaceuticals.

It specialises in research into unsatisfied demand for therapeutic solutions in the fields of cardiology, gastroenterology, mental health and gynaecology.

Fournier Pharma employs about 3,300 people in 30 countries and in 2004 had sales of EUR 593 million and an operating profit of EUR 138 million.

© AFP

Subject: French News

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