Following a review of strategic options for its global pharmaceuticals business, 3M Co. has agreed to sell its branded drug business for approximately $2.1 billion in a three-part transaction.
Graceway Pharmaceuticals, Inc. of Bristol, TN, will purchase 3M's pharmaceutical operations in the U.S., Canada and Latin America for $875 million, while Meda AB, a Swedish drug manufacturer, will purchase its European pharmaceutical unit for $857 million. An investment group led by Ironbridge Capital and Archer Capital has agreed to acquire 3M's drug operations in the Asia Pacific region, Australia and South Africa for $349 million. The businesses include the skin cancer treatment Aldara as well as the drugs Minitran, Difflam, Duromine and Tambocor.
"These are great brands and products, and we believe they will thrive in today's very competitive pharmaceutical marketplace under the direction of their new owners," said Brad Sauer, executive vice president of 3M Health Care.
3M announced in April that it would try to sell the pharmaceutical unit, believing it would be worth more to a dedicated pharmaceutical company with the sales force to make it grow. At that time pharmaceuticals were about 20% of its health care division.
The pharmaceutical division employs about 1,050 people worldwide. 3M estimated that approximately 70% of those employees will have the opportunity to stay with the acquiring companies.
In a company statement, Sweden's Meda said the acquisition of 3M's European unit will strengthen its product portfolio and add about $280 million in annual sales, pushing it toward a goal of becoming the leading specialty pharmaceutical company in Europe. The sale is expected to close in the fourth quarter.