Following six months of negotiations, French drugmaker Sanofi and German pharmaceutical company Boehringer Ingelheim have agreed an asset swap that sees Sanofi exchanging its Merial animal health division for Boehringer’s consumer healthcare (CHC) business, excluding its activities in China. The strategic swap, a significant move in both companies’ histories and in the pharmaceutical sector, lays the foundation for both to reach size and scale in two highly attractive businesses, they said.

Both have agreed that Lyon and Toulouse in France would be key operational centers of Boehringer’s animal health business. These include business operations, R&D and manufacturing facilities in Lyon, and the production site in Toulouse. Boehringer has also agreed to pay particular attention to sustaining the momentum of operations in the US, an important market for the Merial business.

For Sanofi’s future CHC business, Germany will be a key center, focusing on gastrointestinal and cough & cold categories in particular. The company said it expects the overall transaction to be accretive to earnings from 2018. The deal, originally announced in December 2015, is expected to close by the end of 2016, subject to regulatory approvals.