NEWS OF THE WEEK
SOLVAY SELLS ITS DRUG UNIT TO ABBOTT LABS
SO LVAY
ACQUISITION: Firm is latest European conglomerate to split
Solvay Pharmaceuticals’ U.S. R&D activities, located in Marietta, Ga., are included in the sale to Abbott.
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OLVAY IS SELLING its pharmaceutical busi-
ness to Abbott Laboratories for $7.6 billion. Calling the move the best option to secure growth for both its pharmaceutical and nonpharmaceutical sides, Brussels-based Solvay will refocus its efforts on chemicals and plastics. In deciding to shed its drug operations, Solvay is following the lead of several other once-diversified companies, including AkzoNobel, Altana, and BASF. By tying up financial resources in pharmaceuticals, hybrid companies limit their ability to increase size and scale in chemicals, says Britta Holt, an analyst with Londonbased Fitch Ratings. Meanwhile, their drug operations typically suffer from a lack of critical mass in R&D and sales compared with stand-alone competitors. “The proceeds from the divestment will be reinvested in external and organic growth with a sharp focus on long-term value creation,” said Solvay CEO Christian
ONE-TWO PUNCH ON CLIMATE CHANGE REGULATION: Senate, EPA push ahead
on plans to cut greenhouse gases
SCOTT J. FERRELL/CQ/ NEWSCOM
Kerry (left) and Boxer introduce their draft climatechange bill at a rally on Capitol Hill.
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TANDING BEFORE a huge U.S. flag outside the
Capitol building and surrounded by supporters, 12 senators—all Democrats—announced on Sept. 30 the introduction of an 820-page climatechange bill. The bill’s primary authors, Sens. Barbara Boxer (D-Calif.) and John F. Kerry (D-Mass.), stressed the bill’s potential to create U.S. jobs, produce clean energy, provide greater national security through oil independence, and protect future generations from a changing global climate. Later that same day, EPA Administrator Lisa P. Jackson announced a proposal requiring industrial greenhouse gas emitters to reduce future emissions when building new plants or installing new equipment at existing facilities. The regulation is seen as WWW.CEN-ONLINE.ORG
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Jourquin in announcing the deal. He highlighted geographical expansion and sustainable products. After the deal is completed, Solvay will have about $10 billion in annual sales, split about equally between chemicals, including soda ash and electrochemicals, and plastics, such as vinyls and specialty polymers. Abbott will gain about $3 billion in annual sales from Solvay, increasing its overall revenues by about 10%. The Solvay unit will also add some $500 million to Abbott’s $2.7 billion in annual R&D spending. According to Abbott, Solvay brings a portfolio of drugs sold largely outside the U.S. as well as entry into the vaccines market. Abbott has been paying royalties to Solvay on sales of TriCor and Trilipix, cholesterol-lowering fenofibrate drugs that it will now own outright. In addition, Abbott’s international business, driven by specialty products sold in developed markets, will be expanded by combining Solvay- and Abbott-branded generics in emerging markets, said Olivier Bohuon, Abbott executive vice president. In a report to clients, Credit Suisse stock analysts describe the deal as “primarily financial engineering,” rather than any “directional change” for Abbott. Datamonitor analyst Joshua Owide suggests, however, that Abbott’s long-term pharmaceutical sales growth will be significantly better than was forecast before the deal. Solvay says all of its pharmaceutical employees will transfer to Abbott with the business.—ANN THAYER
a backstop if Congress fails to clear a climate-change bill. Jackson’s proposal uses Clean Air Act authority and would include chemical companies, electric utilities, and other large facilities that emit more than 25,000 tons of greenhouse gas emissions per year, the same threshold in the Boxer-Kerry bill. At the Capitol rollout, Boxer, Environment & Public Works Committee chair, told reporters she intends to pass the bill through her committee “within weeks.” However, five other committees also have jurisdiction over portions of the bill. Likely to be the most controversial parts of the bill are provisions allocating carbon dioxide allowances to various industrial sectors, authority for which Boxer’s committee shares with the Senate Finance Committee. The bill would cut greenhouse gas emissions from 2005 levels by 20% in 2020 and by 80% in 2050, slightly faster than a climate-change bill that cleared the House in June (C&EN, July 6, page 8). The bill is currently incomplete, however, leaving “placeholders” for sections to be written by other committees. Kerry explained that Senate Majority Leader Harry Reid (D-Nev.) will “meld” the six committees’ products into a single bill and bring it to the floor. Kerry said he hopes this would be possible before international climate-change discussions take place in Copenhagen in December. Senate committee actions, he said, “will show seriousness of purpose” that may aid U.S. negotiators in Denmark.—JEFF JOHNSON
OCTOBER 5, 2009
