Private equity firms consider $25 billion bid for Novartis . generic drug unit

Several private equity firms are considering bids of up to $25 billion for Sandoz, the generic drug business under pharmaceutical company Novartis, according to multiple people with knowledge of the situation.

Blackstone and Carlyle are considering a potential joint bid, people familiar with their plans said, while Sweden’s EQT is considering a separate bid alongside the Struengmann family, which sold the unit. generic drug Hexal for Novartis for $7 billion in 2005, another person said.

Novartis is weighing options to divest Sandoz, one of the largest generic drugmakers, by either cutting it off or selling it out altogether. Some say discussions about private equity are already at a very early stage. They added that no formal tenders have been made.

Any buying process will start near the summer, said one person with knowledge of the situation.

A person familiar with Sandoz emphasizes an extra, such as Novartis Alcon Eye Care in 2019, continue to be an option

“PE is not the only thing the company is thinking about,” the person said.

They added that there is a remedial process underway to segregate Sandoz’s finances.

“Once you have it, it’s basically ready and it’s just a question of who is the future owner [are],” they said.

“Everybody in the Production Specialist is directly or indirectly asking,” they say. “Officially [Novartis] Feedback will be kept [Sandoz] is an option. . . I think that is very unlikely.”

Bloomberg first reported preliminary interest in Sandoz and that a consortium led by Advent International, Hellman & Friedman and KKR is also considering a bid.

Private equity has raced for investment targets over the past few years: the industry hits a record $1.1 billion in trades in 2021, according to PitchBook data, with the pharmaceutical and healthcare sectors in Health care is one of the most active areas.

In 2021, Blackstone, Carlyle and Hellman & Friedman lead the $34 billion acquisition of medical equipment supplier Medline Industries, biggest private equity purchase of the year.

Investments come from giant corporations such as Unilever, General Electric, IBM, Siemens and Johnson & Johnson self break to streamline their operations. With record new cash to invest and vibrant financial markets, private equity buyers are increasingly able to raise debt and equity to buy large divisions from these conglomerates.

Novartis said late last year it started Sandoz’s strategic assessment, which may include a sale. It is also refocusing on smaller-volume, higher-revenue drugs, in line with industry trends.

A Sandoz insider said discussions about the future of the unit, which generates about a fifth of the group’s sales, have continued for years, with possible scenarios including a listed acquisition and a mixed acquisition by private equity and another large pharmaceutical group.

The person said the business could be worth between $20 billion and $30 billion.

Novartis CEO Vas Narasimhan said last year in an interview with the Financial Times that it had received preliminary interest from a number of investors, including private equity firms and public companies. other pharmaceutical companies.

“We are collecting all the [preliminary proposals] and we’re evaluating them,” he said, though he noted there’s no rush.

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