At a time when its Big Pharma peers have sold noncore assets, Sanofi ($SNY) has diversified, with multibillion-dollar acquisitions of Genzyme and Merial adding biotech and animal health assets, respectively. Now, CEO Chris Viehbacher is looking for smaller, bolt-on deals to boost the vaccine business.
The company's vaccine unit, Sanofi Pasteur, made a string of acquisitions in 2009 and 2010, strengthening in India and Japan while also snapping up a preclinical research technology. At the time, Viehbacher had recently taken over as CEO and was trying to offset losses from generic competition. The scale of the challenge led to Sanofi making some sizable deals--$20 billion for Genzyme, $4 billion for Merial--but it is now looking for smaller takeover targets.
"I'm satisfied with Sanofi's current perimeter. We will keep reinforcing the growth platforms, to the tune of [up to $2.7 billion] per year in acquisitions. But I don't think we should widen this perimeter," Viehbacher told French newspaper Le Figaro. Reuters and AFP picked up and translated the comments. Viehbacher highlighted vaccines, animal health, self-medication, emerging markets and rare diseases as areas in which Sanofi wants to strengthen through acquisition.
Novartis ($NVS) is also looking for assets to boost its flagging vaccine business but this week admitted that the lack of suitable takeover targets means it is more likely to divest the unit. Analysts value the business at around $6 billion, putting it beyond Sanofi's budget. However, Novartis has already shown a willingness to break up the unit--selling blood-transfusion diagnostics assets to Grifols for $1.7 billion--and is open to a range of exit strategies. An outright sale, joint ventures and other deal structures are all possible.