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Warner Chilcott to buy P&G prescription drug biz
(China Daily)
Updated: 2009-08-25 08:08

NEW YORK: Warner Chilcott, an Irish drugmaker that specializes in contraceptives and female hormone treatments, will buy Procter & Gamble Co's pharmaceuticals business for $3.1 billion, the companies said yesterday.

P&G's branded drugs, including osteoporosis treatment Actonel and Enablex for overactive bladders, have annual sales of $2.3 billion. Warner-Chilcott's annual revenue totals about $1 billion.

"The acquisition transforms Warner Chilcott into a global pharmaceutical company, expands our presence in women's health care, establishes us in the urology market in advance of the anticipated launch of our erectile dysfunction treatments, and adds gastroenterology therapies to our product portfolio," Warner Chilcott said in a release.

Banks expected to take part in the financing include Credit Suisse, Citigroup Inc, Barclays PLC and Morgan Stanley, a source said.

In December, P&G said it would end new investments in pharmaceuticals, consider divesting its healthcare brands and focus on its health business on over-the-counter products such as Pepto Bismol and Prilosec.

P&G hired Goldman Sachs in February to help sell its prescription brands or find other ways to exit the business, sources told Reuters at the time.

In April, P&G Chairman A.G. Lafley said pressure from generic products was one motivation to sell the business.

Last month a source familiar with the situation said P&G was in talks with Warner Chilcott and several private equity firms, including Cerberus Capital Management LP, to sell the prescription drug business.

Analysts said in July that Warner Chilcott had an advantage as a bidder since it could squeeze synergies and costs savings out of the acquisition.

Drugmaker Forest Laboratories Inc was also interested in the business, the Wall Street Journal reported.

Warner Chilcott, based in Rockaway, New Jersey, will run the business as a wholly owned unit, the newspaper said.

The acquisition will be the largest involving a leveraged loan in 2009, the newspaper said, citing data from Dealogic. It said this suggests more healing in credit markets, and that Warner Chilcott can absorb the banking fees because interest rates remain historically low.

Reuters

(China Daily 08/25/2009 page17)