Boehringer Ingelheim, Merial announce plans to merge

Sanofi and Boehringer Ingelheim announced today that they've signed contracts that allow them to move forward with an exchange of Sanofi's animal health business (Merial) and Boehringer Ingelheim's Consumer Healthcare business. The transaction is expected to close by the end of 2016, pending approval by regulatory authorities. The integration of the companies into their new respective parent companies would start after closing, according to a release from the two companies.

Andreas Barner, chairman of the board for Boehringer Ingelheim, says the transaction “demonstrates the consistent orientation of our business towards innovation-driven sectors. As a research based pharmaceutical company, we will substantially enhance our position in the future market for animal health and will prospectively be one of the largest global players in this segment.”

Likewise, Sanofi CEO Olivier Brandicourt, MD, says the move positions his company to become a leader in consumer healthcare.

The transaction includes a cash payment from Boehringer Ingelheim to Sanofi of €4.7 billion ($5.18 billion) to reflect the difference in value of the two businesses.

On the animal health side, combining Merial and Boehringer Ingelheim's portfolios in anti-parasitics, vaccines and pharmaceutical specialties would make the combined company more competitive in key growth segments of the industry and bring more value and innovation to customers globally, company representatives say. The Boehringer Ingelheim Animal Health business would more than double its sales to approx. €3.8 billion ($4.19 billion) based on 2015 global sales.

The signing was preceded by six months of negotiations to discuss details of the transaction and ensure compliance with regulatory requirements, the joint release states. Lyon, France, and Toulouse, France, will be the operational centers for Boehringer Ingelheim's animal health business, with business operations, R&D and manufacturing facilities in Lyon and the production site in Toulouse.

As the U.S. market is an important part of Merial's business, Boehringer Ingelheim will pay particular attention to sustain the momentum of the U.S. operations, company officials say.