Viatris Inc. announces divestitures in key business sectors: Comprehensive breakdown
Viatris Inc. (NASDAQ: VTRS), a frontrunner in global healthcare, has unveiled a series of divestitures in its business framework. Leading the announcements, Viatris is set to gather gross proceeds of up to $6.94 billion, netting around $5.2 billion after deducting associated costs.
Details on Divested Units and Financial Implications:
The company’s decision to divest primarily revolves around its Over-the-Counter (OTC) business and other pivotal sectors including the Women’s Healthcare and API sectors in India. Additionally, Viatris is parting ways with rights acquired in the famed Upjohn Transaction. Notably, with these planned divestitures, Viatris remains on track with its previously communicated financial goals. The company also anticipates retaining rights for select products, like Viagra and Dymista, in designated markets, estimating a retained value close to $1.6 billion.
CEO Insights: Viatris’ Strategic Direction
Viatris CEO Scott A. Smith shared, “I am very excited about today’s announcement… it will also set the Company up extremely well as we enter into our Phase 2 strategy for 2024 and beyond.” Smith emphasized the company’s success in retaining pivotal assets and optimizing organizational simplicity, while also highlighting their unwavering commitment to stakeholders during this transition.
Pending Transactions and Potential Partners:
Viatris has received interest from Cooper Consumer Health for its OTC business, which includes manufacturing sites in France and Italy. A transaction with Iquest Enterprises is in motion for the API business divestiture in India, while an agreement with Insud Pharma is underway concerning the Women’s Healthcare sector. In addition, Viatris is set to divest certain rights to Theramex and has agreements in place related to the Upjohn merger. All these transitions are slated to conclude between Q4 2023 and Q2 2024, contingent on regulatory approvals and other conditions.
What This Means for Viatris’ Future:
The divestitures are a strategic move towards debt reduction, with aspirations to achieve a gross leverage target by the first half of 2024. As Viatris embarks on Phase 2 of its strategic plan, these decisions signify its determination to bolster growth and enhance shareholder returns.