Sanofi and Boehringer Ingelheim are in exclusive talks over a $20 billion swap of the French pharmaceuticals company's animal health business for the family-owned German group's consumer health operation.
The deal would consist of an exchange of Sanofi's Merial arm, with an enterprise value of €11.4 billion, with Boehringer's consumer health division, worth €6.7 billion.
Boehringer would also pay €4.7 billion in cash to Sanofi, the companies said today.
The plan signals a radical reshaping of Sanofi under new boss Olivier Brandicourt, who took over in April, and has said he sees limited "limited synergies" between animal health and the rest of the business.
The deal would vault the French drugmaker into number one spot in consumer healthcare with proforma 2015 sales of approximately €5.1 billion and a global market share of around 4.6%.
Boehringer would become the world's second-largest animal health company.
The global pharmaceutical industry has seen a flurry of deal-making in the past two years, as large companies try to focus on a smaller number of businesses where they can establish a leading position.
"In entering into exclusive negotiations with Boehringer Ingelheim, we have acted swiftly to meet one of the key strategic objectives of our roadmap 2020, namely to build competitive positions in areas where we can achieve leadership," Brandicourt said.
The planned deal parallels a three-way trade involving Novartis, GlaxoSmithKline and Eli Lilly in 2014, which saw Novartis and GSK swap drug and consumer assets, while Lilly bought Novartis' animal health arm.
