Without this divesture, there is likely to be reduced competition among vaccine manufacturers in the U.S. and EU. The divesture is key to their $13.5 billion deal.
So as to streamline Boehringer Ingelheim acquisition of Sanofi, the German pharmaceutical maker has agreed to the United States’ Federal Trade Commission’s demand that it divests five types of animal health products.
The proposal will help Boehringer Ingelheim’s $13.5 billion acquisition of Sanofi. The proposal consists of Sanofi obtaining Boehringer Ingelheim’s consumer health unit in Germany which has been valued at $8 billion along with its cash holdings of $5.5 billion, said the FTC in a statement.
According to the FTC, if this divesture isn’t done, it “would harm competition in the U.S. markets for various vaccines for companion animals (pets) and certain parasite control products for cattle and sheep,” stated the commission.
When asked to respond to requests for comments, the spokespersons of both Boehringer and Sanofi and Boehringer were not immediately available for comments.
As per the FTC, without this divesture, the two top rabies vaccine suppliers would merge and thus reduce the number of suppliers for canine and feline vaccines.
Further, it would also diminish the competition among suppliers of products to prevent parasites in sheep and cattle, said the FTC.
Both companies agreed to the divestures so as to allay the European Commission’s concerns that the deal could harm competition and possibly result in price hikes.
“The two companies offered to divest a number of Merial’s marketed and pipeline products, including its existing vaccines Circovac, Progressis, Parvovax, Parvovurax and Mucossifa and pharmaceuticals Ketofen, Wellicox, Allevinix, Genixine, Equioxx Injectable and Equioxx Paste,” had said the EU Commission at that point of time.