The final—and the biggest—piece of Takeda’s $10 billion divestment plan could be wrapped up soon.
The Japanese pharma is in the final stage of talks to sell its domestic consumer health business to U.S. private equity firm Blackstone Group. The two companies aim to shake hands on the final version by the end of this month, Kyodo News reported Wednesday, citing sources close to the matter.
However, the rumored deal size varies. Nikkei Asian Review said Takeda’s getting about JPY250 billion ($2.37 billion), while Kyodo News quoted the sticker at about JPY300 billion ($2.85 billion). Both are notably lower than the unit’s previously speculated worth of JPY400 billion.
Takeda’s Japan OTC franchise is known for its Alinamin line of vitamin tablets and energy drinks. It’s a relatively small business compared with Takeda’s prescription drug department. In the fiscal year ended March 2019, the unit recorded sales of JPY64.1 billion, constituting only 3% of the company’s total haul of JPY2.1 trillion.
Parting ways with the wholly owned OTC subsidiary is no surprise to Takeda news followers. To pay off the huge debt load incurred in its $59 billion buyout of Shire, the Japanese pharma aimed to rid itself of $10 billion worth of assets, targeting drugs outside of its five key focus areas: gastroenterology, oncology, rare disease, neuroscience and plasma-based therapy.
Previously, it sewed up $7.7 billion worth of divestitures, and the Japanese OTC sale would round out the $10 billion goal. Consumer health products were heavily featured in several other deals, including one with Germany’s Stada for products in some Commonwealth territories; with Switzerland’s Acino International covering the Middle East and Africa; Brazil’s Hypera Pharma in Latin America; Danish company Orifarm focused on Europe; and a recent pact with South Korea’s Celltrion on 18 Asia-Pacific products.
But some suspected Takeda management might shy away from a potentially unpopular move by hitting home with a selloff; after all, opponents of the Shire deal had worried that the company might shift focus from its home country, and Takeda has mainly tiptoed around Japan in making those divestitures.
Blackstone was among several rumored final bidders for the OTC unit, along with local consumer health giant Taisho Pharmaceutical and private equity shops Bain Capital and CVC Capital Partners.
The firm also has a large stake in the biopharma industry, having recently raised $4.6 billion for its latest life sciences fund. Blackstone, along with fellow American private equity investor KKR, is reportedly in talks to help The Serum Institute of India raise $1 billion to support manufacturing of five external COVID-19 vaccine candidates. In Japan, it bought Ayumi Pharmaceutical, which is focused on anti-rheumatic drugs and orthopedics, last year.
The Blackstone deal also comes on the heels of Takeda offering early retirement to sales and administrative employees in Japan.