Solvay sells drugs units to Abbot for $6.6 b

Abbott had agreed to buy the unit to bolster its flagging prescription drug business by giving it a number of new medicines in late stages of testing, sources familiar with the deal had earlier told Reuters.

“We are building a new refocused group with the financial means to further accelerate sustainable growth,” Solvay board Chairman Alois Michielsen said in a statement. The enterprise value of the deal is euro 5.2 billion, including Euro 4.5 billion in cash, additional potential milestone payments of up to Euro 300 million between 2011 and 2013 and liabilities of about euro 400 million.

“In anticipation of future market needs, we are ensuring we have the technologies, products, infrastructure and reach,” Abbott Chief Executive Miles White said in a statement. Abbott said the deal will add $0.10 to ongoing earnings per share in 2010, doubling to more than $0.20 by 2012 and increasing thereafter, all before one-time transaction-related items expected to occur in 2010-2012.

Abbott said it would fund the deal with available cash.

Solvay said the proceeds from the deal will be reinvested in external and organic growth in strategic projects in chemicals and plastics with a sharp focus on long-term value creation. Studies about such reinvestments are ongoing, it added. The deal also includes Solvay’s vaccines business. Solvay is present in India through its group firm Solvay Pharma India, which has over 450 employees. The acquisition would also add about US$500 million to Abbott’s annual pharmaceutical R&D investment. Abbott would also acquire Solvay’s vaccines business and the Belgian entity’s small molecular diagnostics unit that would become part of Abbott’s diagnostics division.