AstraZeneca, the world's biggest drug company, will sell its speciality chemicals business to two private equity investors, the Cinven Group and Investcorp. The price: US$ 2.1 billoin. The reason: AstraZeneca wants to focus on its drugs business. The group will continue with its agro-chemicals business.
The speciality chemicals being hived off include pigments used in paints, biocides and other chemicals. These contributed about $1.1 billion to the group's sales turnover and US$ 150 million to operating profits in 1998. The speciality chemicals division had assets of US$ 765 million. Its operations, which have a workforce of 5,500 people are spread over 35 locations all over the world.
AstraZeneca, formed in the US$ 40 billion acquisition of Astra of Sweden by Britain's Zeneca in 1998, will book a post-tax profit of US$ 150 million from the sale of the speciality chemicals business.
This is not the only example of such focus. Rival groups Hoechst, Monsanto and Novartis have taken similar action in order to focus on their drugs and agro-chemicals businesses.