Abbott Bids For Solvay

Abbott Laboratories has reportedly joined the bidding war for Solvay Pharma with the highest offer so far of between E4.5 billion and E5 billion. A fully financed previous bid of E4 billion – E4.5 billion from Swiss drug-maker Nycomed is said to have been too low. Another alleged bidder is the Belgian drugmaker UCB, which bid slightly higher than E4 billion. Japanese Takeda pharma is also considering a bid. The uncertainty about possible bidders arises because, under Belgian law, Solvay does not have the right to communicate its future plans unless a decision is taken.

Nycomed, the other bidder in the news is owned by Nordic Capital, Credit Suisse’s DLJ Merchant Banking, Coller International Partners and Avista. If successful, it can clock sales of E6 billion together with Solvay, and attain a complementary portfolio of cardiac, central nervous system and gastrointestinal drugs.

Meanwhile, Abbott already markets Solvay’s cholesterol lowering drugs, TriCor and TriLipix . Solvay could be its biggest acquisition yet, trumping its previous $6.9 billion Knoll deal. However, the deal would require the resolution of US litigation against the combine concerning formulation of treatments.

Solvay which saw 2008 sales of E2.7 billion, began considering a sale of its drug units in April. Analysts have questioned the lack of synergies between its chemical and drug units as drugs increasingly become biotech-based. They estimate that Solvay investors could now be looking for up to E5.4 billion for the business, but a deal closer to E5 billion would also be acceptable.