Sector News

Deal-hungry Perrigo elbows aside competitors for Omega Pharma

October 30, 2014
Life sciences
Deal-hungry Perrigo is looking for more seats at the over-the-counter table, and the drugmaker may soon get its wish. The company is said to be close to sealing the deal for Belgian OTC maker Omega Pharma, inching past big-name competitors like Sanofi, Actavis and Boehringer Ingelheim.
 
As Bloomberg reports, the drugmaker has entered exclusive talks to purchase Omega Pharma for €4 billion ($5 billion), people familiar with the matter told the news outlet. The deal would deliver Perrigo some much-sought-after OTC clout, as the Belgian drugmaker boasts about 2,000 brands, including painkiller Solpadeine. Not to mention the company’s €1.2 billion ($1.6 billion) in sales last year thanks to standout performances in Europe and Russia–a 16% jump on the previous year’s numbers.
 
Perrigo is no stranger to M&A; the company snatched up Elan last July for $8.6 billion, shifting its domicile to Ireland to reap the benefits of a lower tax rate and expanding its footprint abroad.
 
And Perrigo is not the only one looking for more OTC firepower. Novartis and GlaxoSmithKline have agreed to launch a consumer health JV that could catapult the team to the number one spot in the market. Bayer picked up Merck’s consumer unit in May for $14.2 billion, outbidding the likes of Sanofi, Novartis and Reckitt Benckiser. The move is expected to create a business that generated $7.4 billion in combined 2013 sales, a “major milestone” on the company’s path toward global leadership in nonprescription medicines, Bayer CEO Marjin Dekkers said at the time of the deal.
 
Meanwhile, some pharma M&A has stalled, thanks to new U.S. guidelines making it more difficult for companies to move abroad for tax-paying purposes. Earlier this month, Salix Pharmaceuticals dropped its tax inversion deal for Cosmo Pharmaceuticals, and AbbVie called off its pending $55 billion deal for Dublin-based Shire.
 
By Emily Wasserman
 

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