Procter & Gamble is negotiating with Warner Chilcott Ltd. and Cerberus Capital Management to sell its pharmaceuticals business.
citing unnamed sources, said the parties are in “later-stage discussions” and the price tag could be about $3 billion.
The Courier reported in December that Cincinnati-based P&G was considering selling off some or all of its drug brands.
P&G bases its pharmaceutical business in Mason, Canada and Western Europe, and runs plants in New York and Puerto Rico. The company’s key pharmaceutical brands include Actonel – a $1 billion brand – Intrinsa, Enablex and Asacol. The Mason headquarters employs more than 500, with about 2,700 pharmaceuticals employees worldwide.
In a Wednesday morning report, analyst Ali Dibadj, with Sanford C. Bernstein in New York, estimated the sale of the business would likely dilute earnings by 5 cents to 8 cents per share. Dibajd has estimated the pharmaceuticals business sales at $2.2 billion.
"The $3 billion potential valuation is at the lower end of our range, but we are (pleasantly) surprised that a company would be interested in acquiring the business in the first place, given its portfolio and recent performance," he wrote.
Dibadj has said the biggest drugs in the portfolio – osteoporosis medication Actonel and the colitis drug Asacol – have had flat to slow sales growth, in part due to rising generic sales. Those drugs in the portfolio that hold more promise are tied to marketing agreements or have yet to be approved in the U.S.
Warner Chilcott (NASDAQ: WCRX), headquartered in Rockaway, N.J., is a specialty drug maker with a focus on women’s health and dermatology. Cerberus Capital is a private equity firm headquartered in New York.
Procter & Gamble (NYSE: PG) develops, manufactures and markets consumer products and pharmaceuticals.
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