France’s Bristol-Myers Squibb Co receives $1.6 billion offer from Taisho Pharmaceutical Holdings Co Ltd

The Japanese healthcare firm wants to acquire Bristol-Myers Squibb’s over-the-counter drugs business.

On Wednesday, France-headquartered Bristol-Myers Squibb Co has received an offer from Taisho Pharmaceutical Holdings Co Ltd, a Japanese healthcare firm, to acquire its over-the-counter drugs business UPSA for $1.6 billion.

According to Bristol-Myers’ estimate, if the potential deal goes through it would reduce its 2019 earnings per share (EPS) by $0.04.

According to both companies, Taisho’s offer, which has its presence in cold and flu, anti-inflammatory analgesic, and hair growth segments in Japan and Southeast Asia, is structured in the form of a “put option” agreement.

On exercising the put option, Taisho would acquire UPSA as well as Bristol-Myers Squibb’s assets and liabilities relating to the UPSA product portfolio, said both companies.

UPSA’s portfolio covers a wide range of therapeutics including gastrointestinal, pain, cold and cough, sleep, vitamins and supplements.

Taisho could not be immediately reached for comment.

Taisho’s offer come at a time when drugmakers in Japan are facing the promotion of generic drugs, goverment-led reduction in prices and a shrinking market.

According to Taisho’s second quarter results, sales of its over-the-counter drugs in foreign markets was worth 8.8 billion yen, down by 7.9% in comparison to the previous year for the same period.

Kirkland & Ellis LLP, Freshfields Bruckhaus Deringer LLP and Baker & McKenzie acted as Bristol-Myers Squibb legal advisers, while Deutsche Bank Securities Inc and Jefferies LLC acted as its exclusive financial advisors.

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