Private Equity Buyers Seen as Circling Sandoz
US private equity firms Blackstone and Carlyle may make a joint offer for the Novartis generics unit Sandoz, Bloomberg reports. With six other possible bidders seen as circling Basel-based Sandoz, the news agency’s sources said this sale could shape up to be one of the biggest-ever buyout deals, valued at around $25 billion.
Among the other named would-be suitors, Advent International, Hellman & Friedman and KKR are thought to be bidding for the business separately. Bloomberg said smaller private equity investors such as Cinven and Bain Capital, which jointly own German generics drugmaker Stada Arzneimittel, also are separately weighing bids.
As if there were not enough potential buyers, keen observers have also spotted Swedish buyout specialist EQT in the crowd. The firm is said to be working with Germany’s Strüngmann family, who previously sold their generic pharmaceutical company to Novartis. The Strüngmanns also were the principal financial power behind vaccine maker BioNTech before it went public.
In October 2021, Novartis announced it was starting a strategic review of Sandoz to maximize shareholder value. The generics player is said to be more valuable than many of its peers as it has expanded in recent years to develop biosimilars for top-selling drugs.
Late last year, Novartis CEO Vas Narasimhan sought to quash rumors of strong private equity interest in the business, saying that beyond several requests for information no concrete offers were on the table.
But Narasimhan conceded that the right time to divest Sandoz could be soon, as pressure on prices of off-patent drugs intensifies. The drugmaker’s official timeline to complete a deal extends until the end of 2022. The activities concerned accounted for 2021 sales of $9.7 billion, about a fifth of the Novartis group’s turnover.
Bloomberg’s sources said any deal would have to be crafted carefully for Novartis to avoid encountering tax issues in an outright sale of Sandoz.
Author: Dede Williams, Freelance Journalist
