Sanofi Expands Presence in China w/ $520.6M Acquis. of BMP Sunstone

October 28, 2010 12:12 PM EDT$520.6M+Acquisition+of+BMP+Sunstone+(BJGP)/6059820.html

In a midday announcement today, sanofi-aventis (NYSE: SNY) and BMP Sunstone Corporation (Nasdaq: BJGP) announced that they have entered into an agreement whereby sanofi would acquire all outstanding shares of BMP Sunstons for a consideration of $10 per share, or $520.6 million total. Shares of BMP were halted prior to the announcement.

Sales of BMP were $146.87 million in FY09, a 28% increase over FY08. Current liabilities for the company were reduced by 36% in 2009, but the company reported new long-term debt of $36.75 million. The debt has since whittled down to $33.99 million as of their second quarter earnings report in early August.

Sanofi Chief Executive Officer Christopher Viehbacher commented, "The acquisition of BMP Sunstone will not only leverage our consumer healthcare business in China, but will also bring us unique access to new expanding distribution channels which are expected to account for a third of the pharmaceutical market in China in the coming years."

The acquisition will make sanofi one of the leading healthcare companies in China following their recent establishment of the Hangzhou Sanofi Minsheng Consumer Healthcare joint venture.

China's Consumer Healthcare market is estimated to be €12 billion in size, with an 11% CAGR since 2005. The market is the second largest in the world, behind the U.S.

Sanofi has already commenced a hostile takeover of Genzyme (Nasdaq: GENZ) earlier in the year, to the tune of $18.5 billion. CEO Viehbacher saw no reason why the company should move from their $69 per share offer, and hasn't indicated that they will increase their bid any time soon. Genzyme has told its shareholders to reject the offer, and made a case that they were worth closer to $89 per share. Sanofi's tender is set to expire on December 10, 2010.

Sanofi shares are trading 1% higher today.