As Novartis reviews its generics business, the list of potential Sandoz suitors has grown. The deal could become one of the biggest generic industry acquisitions ever—assuming an offer makes it across the finish line.
Investor groups Blackstone and Carlyle could join forces on a massive $25 billion bid for Sandoz, Bloomberg reports, citing people close to the matter. The private equity firms are discussing a potential joint offer for the Novartis unit, the publication said. Separately, Advent International, Hellman & Friedman and KKR & Co. are sizing up their own approaches, Bloomberg’s anonymous sources said.
Sandoz is a sizable target, so it could make sense for investor groups to merge their bids. But it’s early yet, and the suitors may decide against teaming up or proceeding with bids altogether, Bloomberg said.
The interest in Sandoz comes as Novartis takes a magnifying lens to the business. In October, the Swiss drugmaker launched a strategic review of its generics arm, leaving all options on the table. Novartis said it would provide an update by the end of 2022.
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It’s not unusual for private equity firms to unite on the hunt for big acquisitions, Bloomberg notes. Blackstone, Carlyle and Hellman & Friedman in June agreed to buy medical supply company Medline Industries for a whopping $30 billion, for example. Hellman & Friedman also partnered with Bain Capital in November to snap up medical IT outfit Athenahealth for $17 billion.
Meanwhile, Sandoz has already attracted some interest. In November, German newspaper Handelsblatt reported that Swedish-based investment group EQT and Germany’s Struengmann family were weighing a joint move to buy the Novartis unit for $21.6 billion. Interestingly, Struengmann twins Thomas and Andreas are no strangers to Novartis, having sold it their generics maker Hexal back in 2005. They’re also primary investors in Pfizer’s COVID-19 vaccine partner BioNTech.
That same month, Novartis CEO Vas Narasimhan confirmed interest in the company: “There have been various requests for more information, but no concrete offers,” he told German magazine WirtschaftsWoche.
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Whether it’s $21 billion or $26 billion, a successful Sandoz buyout could eclipse every other M&A deal from last year. 2021 saw a relative lull in merger and acquisitions activity by drugmakers—though 2022 seems poised for a rebound.