EU approves BMS acquisition of Du Pont's pharmaceutical operations

The European Commission has approved a deal under which Bristol-Myers Squibb (BMS) will acquire Du Pont Pharmaceuticals. The two American companies are, respectively, the world's 5th and 42nd largest in the medicines sector.

Clearing the takeover, Brussels said that the merger would not entail a significant increase in the company's market share and would not change BMS's global ranking.

Bristol-Myers Squibb's products and services focus on oncology, cardiovascular and antiinfective treatments, cholesterol-fighting medications and treatments for diabetes. It also manufactures infant formula and nutritional supplements.

Du Pont, described by the Commission as a 'minor player', is a wholly-owned subsidiary of the giant chemical company E.I. du Pont de Nemours. It is engaged in research, development and delivery of pharmaceutical and imaging, or radio-pharmaceutical, products to treat various illnesses and diseases, including HIV/AIDS, cardiovascular disease, inflammatory and neurological diseases.

Brussels said the most important overlap in the two companies activities was in HIV/AIDS antivirals, plain ACE inhibitors and combination ACE inhibitors.

However, the Commission did not impose conditions on the deal, notably because it viewed the HIV/AIDS antivirals sector as fast moving, where the expanded company would face intensive competition, most importantly from the UK company GlaxoSmithKline.

In view of this, Brussels said the transaction would not threaten competition within the EU pharmaceuticals market and could therefore be allowed under European merger rules.

BMS is paying US$7.8bn (€8.7bn) in cash for the business. Du Pont, whose pharma division had sales of US$1.5bn (€1.7bn) last year, said it would use the proceeds to complete an ongoing share buyback programme worth US$2.5bn (€2.7bn).