Sanofi and Boehringer to swap animal health for consumer med businesses in $20 billion deal

French pharma major Sanofi (Euronext: SAN) and family-owned German peer Boehringer Ingelheim revealed this morning that they have started exclusive talks to negotiate assets swaps that are valued at around 18.1 billion euros ($19.7 billion). Sanofi’s shares were up 4.7% to 78.23 euros by mid-morning trading.

The proposed transaction would consist of an exchange of Sanofi animal health business Merial with an enterprise value of 11.4 billion euros and Boehringer Ingelheim consumer healthcare (CHC) business with an enterprise value of 6.7 billion euros. Boehringer Ingelheim CHC business in China would be excluded from the transaction. The transaction would also include a gross cash payment from Boehringer Ingelheim to Sanofi of 4.7 billion euros. Just last month, reports were circulating that Sanofi was preparing to divest its Merial business, which the sources valued at around 12 billion euros (The Pharma Letter November 28).

This is the second major asset swap deal this year; the first saw GlaxoSmithKline transfer its oncology assets to Novartis in exchange for the latter’s vaccines business (ex-flu) and the setting up of a consumer health joint venture.