Monday, March 12, 2007

Surprise strategic buy in the pharma industry US-based pharmaceutical company Schering-Plough bought Organon BioSciences, a division of Dutch company Akzo Nobel in a $14.4 billion deal. The move comes as a surprise, as Akzo Nobel was talking both about spinning off the company and about selling it to one or another equity group. Akzo Nobel is planning to concentrate on its chemicals industry. Akzo is a leader in the paint and coatings industry It's also big in pulp and paper chemicals, crop nutrients, polymers, and catalysts Organon, founded in 1923, specializes in human birth control, fertility and gynecological medicines, as well as psychiatric drugs, and veterinary medicines and vaccines. Schering-Plough is also a major provider of makes animal medicines, along with drugs treating allergies, cancer, cholesterol, and infections. It also has a strong over-the-counter health products line, with brands such as Lotrimin, Coppertone and Bain de Soleil (sun and skincare). Claritin (allergies), and Dr. Scholl's and Tinactin (foot care). It also co-markets the erectile dysfunction drug Levitra. One of the big prizes is Organon's potential blockbuster drug Asenapine, being tested for treating schizophrenia. The deal is the second biggest ever involving a Dutch company. (#1 is the pending merger of Dutch power companies Nuon and Essent.) . Speculation is strong that the cash-rich Akzo Nobel may, with its influx of new capital, bid for Imperial Chemical Industries PLC (ICI), the UK's largest specialty chemicals company and another major paint and coatings company, US-based coatings company Valspar, US-based Sherwin-Williams, the #1 US paint company. Of course, the bulging coffers of Akzo may attract its own set of takeover bids. Akzo Nobel is just another in a long line of companies in various industries dropping their pharmaceutical divisions to concentrate on other areas of expertise. These include DuPont, BASF, and Dow Chemical, while drug companies AstraZeneca and Novartis have sold off their chemical operations. 7:33:00 PM

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