Eyeing consumer health, Meda nabs Italy's Rottapharm in long-sought $3B deal

Meda has staunchly refused every takeover bid that's come its way. But that doesn't mean the Swedish drugmaker isn't interested in M&A. It just prefers to be the buyer. Meda says it's agreed to buy the family-owned Italian drugmaker Rottapharm for about 21.2 billion kronor ($3.1 billion), with an eye on its consumer health offerings.

Meda will send the Rovati family more than 15.3 billion kronor in cash, 30 million Meda shares valued at 3.3 billion kronor, and another payment of 2.6 billion kronor in January 2017, in return for 91% ownership of Rottapharm. The family will keep a 9% stake once the deal closes, Meda said in a statement Thursday.

That $3.1 billion total finally meets the Rovati family's price expectations, after years of trying to sell. Earlier this month, Rottapharm nixed a planned IPO--The Rovatis' latest attempt to cash out--because of lackluster investor interest.

The Italian company posted sales of $718 million in 2013, Bloomberg reports. It will bring Meda a stable of OTC products including Dona, used to promote healthy joints, Agiolax for constipation and Saugella for intimate hygiene.

Meda CEO Jörg-Thomas Dierks

The deal is part of a grow-through-acquisitions strategy Meda CEO Jörg-Thomas Dierks referenced in May, when he said the company could double in size within two years, Bloomberg notes. "We've had the vision to become a worldwide leading specialty pharma company," he said on a conference call Thursday, as quoted by the news service. "This is the next step on a longer journey."

That strategy does not include a buyout by a larger pharma player; Meda made that clear when it spurned an April offer from Mylan ($MYL) and, before that, countered rumors that it was in talks with India's Sun Pharma.

But Meda may still be taking cues from its more voluminous peers, many of which are bulking up in the consumer health space. Bayer, for instance, recently snagged Merck's ($MRK) consumer health unit for $14.2 billion on its quest to become the world's OTC leader. Sanofi ($SNY), too, has been on a consumer health binge as of late, continuing to build its presence in the field ever since its 2009 buyout of Chattem.

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