Will buyers bite for Unipharm amid Russian M&A slow-down?

Drugmakers have been buying out OTC companies left and right lately. But would that demand apply to a Russia-focused consumer company, considering the recent slowdown in Russian investment? Unipharm is about to find out.

The privately-owned maker of Vitrum vitamins and Grippex cold and flu tablets has hired advisory firm Houlihan Lokey to explore a sale that could value it around $500 million, according to Reuters' sources. But that's only if buyers bite.

While Unipharm is headquartered in the U.S., a large part of its business lies in Russia, which has lately seen an M&A drought thanks to a struggling economy and the Ukraine crisis. In May, Russian biosimilars developer Biocad went to the country's own lead pharma company, Pharmstandard, after some speculated the climate had scared off potential bidders Pfizer ($PFE) and Amgen ($AMGN).

That's not to say there aren't western drugmakers out there willing to take a chance on Russia. In June, Illinois-based Abbott Laboratories ($ABT) agreed to fork over $495 million for Russian generics-maker Veropharm, expanding its footprint in the fast-growing market and nabbing a trio of manufacturing facilities.

And for some consumer-focused drugmakers, the OTC payoff may be worth the risk. Pharma giants like Bayer--which in April shelled out $14.2 billion to buy Merck's ($MRK) consumer unit--and Sanofi ($SNY) have been racing to bulk up in the steadily expanding field, and Russia's swelling middle class make it an attractive place to do that, a Moscow-based banker told the news service.

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