Bristol-Myers Squibb Co to sell some of its brands in Mexico and Brazil

1 Feb 2013, 23:00
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Bristol-Myers Squibb Co to sell some of its brands in Mexico and Brazil

Bristol-Myers Squibb Co is in the final stages of selling some of its brands in Mexico and Brazil with any sale possible bringing in as much as $750 million, the Wall Street Journal reported, citing people familiar with the matter.


The New York-based healthcare giant tries to auction the brands, with a small handful of U.S. and European drug and consumer companies still in the bidding, according to people familiar with the matter. It's unclear which bidders are still in the running for the business.


A deal could be reached in the next two to three weeks, the people said. A spokeswoman for Bristol said, "We don't comment on rumors and speculation".


The brands, such as a pain reliever similar to Tylenol called Tempra that is sold in Mexico, together generate sales of just $100 million to $150 million per year, one of the people said.


But, according to this person and others, the winning bidder may pay in the neighborhood of five times that, a lofty multiple compared with the average takeover deal - highlighting the desirability of established consumer brands in economies with higher growth potential like Mexico and Brazil.


Bristol, which has a market value of nearly $60 billion, derives most of its roughly $18 billion of annual sales from drugs such as the Erbitux cancer treatment.


A sale of the Latin American business would be the latest in a series of consumer divestitures by the company in recent years, including most notably the spinoff of Mead Johnson Nutrition Co. (MJN), a big maker of baby-food products, in 2009.


Bristol is one of the few sizable drug makers that has not moved aggressively to expand in 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.


Many rivals are eying the markets, because sales there are growing far faster than in the U.S. and Europe. Drug sales in Brazil, for instance, are expected to jump to $47 billion by 2016, up from $30 billion in 2011, according to IMS Health.


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