German pharmaceutical company Boehringer Ingelheim agreed to divest five types of animal health products to settle charges that a proposed asset swap with Sanofi would harm competition, the U.S. Federal Trade Commission said on Wednesday.
The proposed asset swap involved Boehringer Ingelheim's acquisition of Sanofi's $13.5 billion animal care subsidiary and Sanofi's obtaining the Germany company's consumer health care business unit, valued at nearly $8 billion, plus $5.5 billion in cash, the FTC said in a statement.
Without the divestitures, the proposed swap "would harm competition in the U.S. markets for various vaccines for companion animals (pets) and certain parasite control products for cattle and sheep," the commission said.
The sale of the U.S. pet vaccine assets will occur shortly after the closing of the BI-Sanofi swap transaction, which the company anticipates to close by early 2017, Boehringer spokeswoman told Reuters in an email.
Sanofi was not immediately available for comments.
The FTC said that without the divestitures the proposed transaction would reduce the number of suppliers of canine and feline vaccines from four to three. It would combine the two top rabies vaccine suppliers.
It would also reduce competition among suppliers of products to prevent parasites in cattle and sheep, the FTC said.
In November the companies agreed to divestitures to allay European Commission concerns that the deal would harm competition and possibly result in price hikes.
"The two companies offered to divest a number of Merial's marketed and pipeline products, including its existing vaccines Circovac, Progressis, Parvovax, Parvovurax and Mucossifa and pharmaceuticals Ketofen, Wellicox, Allevinix, Genixine, Equioxx Injectable and Equioxx Paste," the EU said at the time.