Sanofi-Aventis makes foray into Japan's generics market via a JV and minority stake in Nichi-Iko Pharma

Confirming both the drug major's diversification strategy and recent rumors of an acquisition in the Japanese generics market, France's Sanofi-Aventis this morning revealed that it has entered into an agreement with Nichi-Iko Pharmaceuticals to establish a new joint venture, called sanofi-aventis Nichi-Iko KK, in order to develop a generic business in Japan.

The new joint venture will be held 51% by the French firm's local unit Sanofi-Aventis KK and 49% by Nichi-Iko. In addition, Sanofi-Aventis will acquire 1,524,500 shares of Nichi-Iko, to be issued through a third-party allocation, and as a result will hold a 4.66% in the latter, which is a leader and fastest growing generics company in Japan, with 2009 sales reaching 54.8 billion yen ($609.6 million).

Sanofi-Aventis will pay 2,894 yen per Nichi-iko share, a 4%discount to the closing price the previous day - when the stock leapt on rumors of an approach from the French firm, for a total of around $48.4 million.