French pharmaceutical firm Sanofi and German drugmaker Boehringer Ingelheim are in exclusive talks to swap certain parts of their businesses worth €18.1bn ($20bn).

Sanofi’s €11.4bn animal health business (Merial) would be involved in the transaction, as would Boehringer’s €6.7bn consumer health (CHC) operations. The company’s CHC business in China would be excluded.

"I am confident that Boehringer Ingelheim will enable Merial to fully express and develop its potential in the attractive but competitive animal health market."

The deal will also see Boehringer pay €4.7bn in cash to the French drug maker.

The move is expected to turn Sanofi into a major force in consumer healthcare with sales of around €5.1bn, while Boehringer would become the second largest company in animal health.

The addition of the Boehringer CHC business would improve Sanofi’s presence in Germany and Japan, especially as it would give ‘critical mass’ in products for coughs and colds, as well as access to brands in antispasmodics, gastrointestinal, VMS and analgesics.

The swap would also help expand Sanofi’s CHC business in the US, Europe, Latin America and Eurasia.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Sanofi CEO Olivier Brandicourt said: "In entering into exclusive negotiations with Boehringer Ingelheim, we have acted swiftly to meet one of the key strategic objectives of our roadmap 2020, namely to build competitive positions in areas where we can achieve leadership.

"This transaction would allow Sanofi to become a world leader in the attractive non-prescription medicines market and would bring a complementary portfolio with highly recognised brands, allowing for mid and long-term value creation.

"I am confident that Boehringer Ingelheim will enable Merial to fully express and develop its potential in the attractive but competitive animal health market."

The combined portfolios and technology platforms in anti-parasitics, vaccines and pharmaceutical specialities would place the combined company in major growth segments of the industry.

Following consultations with the relevant social bodies, the execution of definitive agreements is expected in the coming months.

Subject to appropriate regulatory approvals, the companies intend to close the potential transaction in the fourth quarter of next year.