Solvay has written to its employees telling them that it is considering its strategic options, including a possible divestment of its pharmaceuticals business, but complains “it is unfortunate that speculation in the media created distraction during this process”.
There has indeed been plenty of speculation, with Sanofi-Aventis being cited as a likely purchaser for the pharma division of the Belgian firm’s business which also consists of chemicals and plastics. There have been reports that Sanofi is understood to have made a direct approach to Solvac, the family-owned holding investment group that controls 30% of Solvay.
Solvay is limiting itself at the moment to saying that an “evaluation process” but says that this involves the whole business. It says that “the hybrid structure of the group is not an inheritance of the past but results from a deliberate policy” and “this strategy has paid off”.
Furthermore, the Brussels-headquartered firm says that “the benefits realised from our pharmaceuticals sector strategy has enabled us to better withstand the effects of the current crisis and validate our working hypothesis”. However it adds that “opting for comfort would imply that we stay with our positions and withdraw into our shell until the present crisis blows over. We would ignore that the world is in upheaval and that our complacency becomes a problem tomorrow”.
The company goes on to say that its Transformation 2015 programme for pharma has led to a “profound reorganisation of our R&D, which moves our projects and products closer to the market” and focused more on “new, more personalised therapies” through its acquisition of Innogenetics last year. Solvay has also expanded in emerging markets which account for 20% of pharma turnover and it has been acquiring new compounds. However, “we must be aware of the fact that continuing this approach will require considerable effort and important resources”.
As such, the current assessment “is most important in the pharmaceuticals sector, as opportunities are scarce and the required financial resources are significant”, Solvay said. The options include keeping “the status quo”, seeking new acquisitions, divestiture, floating the unit on the stock exchange or partnering with another company.
In this context, “we have asked specialists to assist us with the process”, Solvay said, who will “enable us to evaluate the potential of our pharmaceuticals activity and its true value…an important element in determining any strategic move”. Still, “no conclusion can be drawn before the current assessment is completed” and the firm said it continue with the review “in a professional manner, calmly and objectively with only the long-term interests of the group and its people in mind”.
