Takeda Pharmaceutical will divest its Takeda Consumer Healthcare Company Limited (TCHC) to The Blackstone Group for $2.3 billion as the company continues to divest non-core business units in order to pare down debt accumulated from its $62 billion acquisition of Shire Plc.
This morning, Osaka, Japan-based Takeda officially announced the sale of TCHC to the investment firm. The portfolio included in the sale includes a variety of over-the-counter medicines and health products that include Alinamin, its top selling product and Japan’s first vitamin B1 preparation, and Benza, a cold remedy. The portfolio generated revenues of more than ¥60 billion (about $537 million) in 2019. Blackstone intends to develop the business together with current TCHC management and continue to employ its employees. BioSpace first reported the proposed deal last week. The transaction is expected to close by the end of March 2021. For Blackstone, the transaction marks the second private equity transaction in Japan’s healthcare sector following the acquisition of AYUMI Pharmaceutical in 2019.
“TCHC is well-positioned to grow its established brands in Japan and launch new and expanded product offerings. We see tremendous potential for TCHC in Japan and throughout Asia, and we are confident that Blackstone’s global network and expertise in the sector can accelerate TCHC’s growth,” Atsuhiko Sakamoto, Head of Private Equity in Blackstone Japan said in a statement.
Takeda Chief Executive Officer Christophe Weber said the deal will provide TCHC, which became its own business entity in 2017, with the “ownership, resources and strategic focus” necessary for the division to thrive and meet the demands of its customer base. The move also allows the Japanese pharma giant to focus its finances on the company’s core therapeutic areas.
During an online conference this morning, Weber said the decision to sell its Japanese-based consumer health business due to the difficulties of continued investment in that business while supporting its own core therapeutic concerns. Weber said it’s not smart to hold onto a business while not financially ensuring its continued growth through additional investments.
“TCHC played an important role in Takeda’s long history, but with our growth strategy now focused on five key business areas – Gastroenterology (GI), Rare Diseases, Plasma-Derived Therapies, Oncology and Neuroscience – and an increasingly competitive consumer health care market in Japan, the ownership transition will benefit both TCHC and Takeda. We are confident that under Blackstone, TCHC will be well-positioned to continue growing and developing its product offerings in the years to come to address the evolving needs of consumers,” Weber said in a statement.
Since the acquisition of Shire, Takeda has worked to reduce the $30 billion of debt it took on in that deal. The company has divested multiple assets and business units, including three significant deals this year. Most recently, South Korea-based Celltrion paid $278 million for a portfolio of prescription and over-the-counter drugs sold in the Asia Pacific market that includes prescription drugs Nesina, a diabetes treatment, and hypertension drug Edarbi. Also, the company sold non-core products in Europe to Orifarm Group for about $670 million. That deal included two manufacturing sites in Denmark and Poland. Hypera Pharma acquired products sold in Latin America for about $825 million in March.