P&G close to finding buyer for its pharma unit

Procter & Gamble (P&G) is close to finding a buyer for its pharmaceutical division for around $3bn according to various media reports.

The unit, which counts the osteoporosis drug Actonel and the bladder treatment Enablex among its products, has been the subject of speculation since December when CEO AG Lafley said the firm would no longer invest in drug development.

In February the UK’s Financial Times reported that P&G would sell its pharmaceutical unit and instead focus on “high-growth” businesses.

Later that month Reuters reported that P&G had hired Goldman Sachs to help it sell its prescription brands or find other ways to exit the business.

According to a report in the Wall Street Journal yesterday, Warner Chilcott and private-equity group Cerberus Capital Management are in late stage buyout talks, although neither organisation has issued a response.

The general response among observers is that a takeover by either company would make sense. Reuters suggests that P&G’s drug portfolio, which also includes over the counter medicines like Prisolec and Pepto Bismol would be a good fit for Warner.

In contrast, the WSJ article suggests that Cerberus’ proposal to operate the pharma unit as a standalone organisation represents a more attractive option for P&G. Either way it is anticipated that a deal will be made later this summer.

A P&G spokesperson did not comment directly on the speculation but did tell the paper that the firm would look at all its options including the “divestiture of some or all of our pharmaceutical assets.”