Meda completes purchase of 3M’s pharmaceuticals business

Swedish pharmaceutical company Meda AB has purchased diversified conglomerate 3M's European pharmaceuticals business for 5.64 billion kronor.

Meda, which markets drugs in 24 European countries, will take control of regional marketing and intellectual property rights for 3M’s branded drugs including Aldara, Tambocor and MetroGel-Vaginal.

After the purchase Meda expects to become one of Europe’s leading speciality pharma companies, with sales exceeding 7 billion kronor.

The initial finance for the purchase will be provided by a bank loan. Refinancing will partly occur through a preferential share issue amounting to a maximum of SEK 1,857 million, said Meda in a statement.

The company will seek approval for its refinancing scheme at an Extraordinary General Meeting on January 10.

Meda expects cost synergies to exceed 150 million kronor after the purchase through a stronger marketing organisation in major countries such as France, Germany, Italy, Spain, and the UK. Administrative rationalisation will account for the largest proportion of this cost saving.

The sale was part of a deal announced in November whereby 3M also said it would sell its Asia Pacific drug business to Ironbridge Capital and Archer Capital, and U.S., Canadian, and Latin American operations to Graceway. Both transactions closed in the fourth quarter 2006.

Shares of 3M Co. fell 23 cents on Friday to close at $77.93 on the New York Stock Exchange.