Bristol-Myers Squibb Co is looking for a buyer to collect brands in Mexico and Brazil that will fetch as much as $750 million. This deal will generate strong demand from the corporate acquirers for consumer-health assets around the world.
The New York-based healthcare company is in the late stages of an auction of the brands, with a small handful of U.S. and European drug and consumer companies still in the bidding. It’s not very clear which bidders are still running the business.
The brands, including pain reliever similar to Tylenol called Tempra that is sold in Mexico, together generate sales of just $100 million to $150 million a year.
Some people said, the winning bidder may pay in the neighborhood of five times that, a lofty multiple compared with the average takeover deal, showing the desirability of established consumer brands in the economies with higher potential like Mexico and Brazil. Bristol, which has a market value of nearly $60 billion, derives most of it’s roughly $18 billion of annual sales from the drugs such as the Erbitux cancer treatment.
The global drug maker is one of the few sizable drug companies that have not moved aggressively to expand in the emerging markets like Mexico and Brazil. Only 15% of the company’s $17.6 billion in 2012 sales were outside the U.S. and Europe, including Japan and South Korea.
A sale of Latin American business would be the latest in a series of consumer divestitures by the company in recent years. Many rival companies are also looking in the markets, as sales there are growing far faster than in the U.S. and Europe.
The drug sales in Brazil, are expected to surge to $47 billion by 2016, up from $30 billion in 2011, as per IMS Health. Bristol-Myers Squibb is a pharmaceutical company based in New York City. The company is engaged in manufacturing prescription pharmaceuticals in areas includingcancer, HIV/AIDS, cardiovascular disease, diabetes, hepatitis, rheumatoid arthritis and psychiatric disorders.