Sanofi agrees to 22.8 billion-euro animal health swap deal for Boehringer's consumer unit

French pharma major Sanofi (Euronext: SAN) and German peer Boehringer Ingelheim have signed contracts to secure the strategic transaction initiated in December  2015 which consists of an exchange of Sanofi's animal health business (Merial) and Boehringer's consumer healthcare (CHC) business.

This step marks a major milestone before closing of the transaction which is expected by year-end 2016 and remains subject to approval by all regulatory authorities in different territories. The integration of Boehringer’s CHC business into Sanofi and Merial into Boehringer would start after closing.On closing this transaction – with an asset value of around 22.8 billion euros ($25.3 billion) - will be a significant business swap in the pharmaceutical sector and an important event in the history of both companies. Market reaction to the deal was muted, as Sanofi’s shares gained just 0.65% to 69.9 euros by mid-morning in Paris.

Prof Dr Andreas Barner, chairman of the board of family-owned Boehringer Ingelheim, said: "This is a win for Boehringer Ingelheim and Sanofi alike. Moreover, it is one of the most significant steps in our corporate history. It demonstrates the consistent orientation of our business towards innovation-driven sectors. As a research based pharmaceutical company, we will substantially enhance our position in the future market for Animal Health and will prospectively be one of the largest global players in this segment. The similarity in culture and approaches of BI and Sanofi will ensure that the businesses acquired by the other partner will develop well in the future."