3M sells pharma business

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3M has entered agreements to sell its global branded pharmaceuticals business in three parts for approximately $2.1bn.

Graceway Pharmaceuticals has agreed to acquire 3M’s pharmaceutical operations in the US, Canada, and Latin America for $875m.

Meda has agreed to acquire 3M’s pharmaceutical business in Europe for $857m. This agreement will be implemented by each 3M subsidiary subject to compliance with third-party notice and approval requirements.

Ironbridge Capital and Archer Capital have agreed to acquire 3M’s pharmaceutical operations in the Asia Pacific region, including Australia and South Africa, for $349m.

Under the agreements, the purchasers will acquire regional marketing and intellectual property rights for 3M’s branded pharmaceuticals, including Aldara, Difflam, Duromine, Tambocor, Maxair, Metrogel-Vaginal and Minitran. 3M’s Drug Delivery Systems Division will be a source of supply to the acquiring companies for the products. As part of the transaction, Graceway Pharmaceuticals will also acquire the rights to certain IRM molecules.

There are approximately 1,050 employees in 3M’s Pharmaceuticals Division worldwide. 3M estimated that ‘approximately 70 percent of those employees will receive employment opportunities’ with the acquiring companies.

The agreements follow 3M’s review of strategic options for its branded pharmaceuticals business and its immune response modifier (IRM) platform, which was announced in April.

The transactions are scheduled to close in the fourth quarter, subject to customary closing conditions, including regulatory approvals, and in the case of Graceway Pharmaceuticals, and Ironbridge Capital and Archer Capital, the receipt of financing. 3M will record a gain related to the transactions, and in addition, will incur various restructuring charges.