Sanofi-Aventis Group negotiates acquisition of Brazilian Medley
Valor Econômico 02/16/2009
Medley, leader in the production of generic medicines in the country, negotiates the sale of its control to French laboratory Sanofi-Aventis. The liquidity crisis of the last months, with the increase in the cost of credit and the shortage of credit facilities for working capital, caused the Negrão family, owner of Medley, to speed the search for alternatives for the business, as Valor discovered with people familiar with the transaction. It is expected that the acquisition should be announced soon, according to such insiders. But the negotiation, according to these sources, still depends upon certain conditions, such as the agreement on the price and the separation of some problem assets. The sale of the share control of the company, headquartered in Campinas, in the interior of São Paulo, may exceed R$ 500 million (US$ 217.4 million), a figure below that demanded by the controllers in the past when they intended to receive R$ 1 billion (US$ 435 million). Brazilian laboratory Aché, which showed recent interest in increasing its position in the segment of generic medicines, had even got to talk to Medley, but it lost the dispute for the French group. Swiss bank UBS provides consulting to Medley. Asked about that, Medley said it would not comment the subject. Sanofi-Aventis' press services in the country denied the information. For Sanofi-Aventis, the purchase has the power to replace the company in the leadership in the Brazilian pharmaceutical retail market, position which was lost to EMS, another Brazilian laboratory, strong in generic medicines, last year.