Boehringer Ingelheim Will Move North American HQ to Georgia, Bulk of Employees Will Remain Unaffected
November 16, 2016
By Mark Terry, BioSpace.com Breaking News Staff
In June 2016, Paris-based Sanofi and Germany-based Boehringer Ingelheim, penned an asset swap, exchanging Sanofi’s Merial animal drugs business with Boehringer’s over-the-counter (OTC) drugs business. Today, Boehringer Ingelheim Vetmedica (BIVI) announced that as part of the integration of Merial, it was locating its North American and U.S. Animal Health headquarters in Duluth, Georgia.
The two companies started negotiations for the deal in December 2015. Boehringer Ingelheim’s consumer health care (CHC) business had an enterprise value of 6.7 billion euros. Sanofi’s Merial had an enterprise value of 11.4 billion euros. In addition, Boehringer paid Sanofi 4.7 billion euros in cash.
The deal is expected to increase Sanofi’s share of the consumer healthcare market to about 4.6 percent, as well as boost its operations in specific markets in Germany and Japan. Boehringer’s China business was not included in the deal.
Merial has a number of pet health brands, including Frontline, Heartgard, NexGard, Broadline and Purevax. Its medical brands for farm animals includes Vaxxitek, Eprinex, Ivomec, Longrange, Circovac and GastroGard.
Once the deal is finally closed, Boehringer’s U.S. Animal Health leadership team will set up at the already existing Merial facility in Duluth, Ga. Most of the employees at its St. Joseph, Missouri facility will be unaffected. That location will remain a “critical part of the integrated business” and continue as the largest animal health employers in the KC Animal Health Corridor. “Right now, we estimate up to 75 job opportunities will be created at the Duluth site,” said Melissa Chestnut, a senior specialist of public relations and internal relations with Boehringer, to News-PressNow. “Those (positions) could be filled by anyone from anywhere. It is too early to tell how many employees this will impact here in St. Joseph.”
“Following the close of this transaction, we will become the second largest animal health player in the world,” said Albrecht Kissell, president and chief executive officer of Boehringer Ingelheim Vetmedica. “An Atlanta-area headquarters will allow us to stay more closely connected to our U.S. and international operations, teams and clients, fostering greater collaboration and interconnectedness around the globe. We look forward to being a partner of Duluth, the greater Atlanta area and the State of Georgia, while continuing our vibrant presence in St. Joseph.”
The deal is expected to close in January 2017. It has yet to receive Federal Trade Commission approval. Currently Boehringer Ingelheim employs about 800 people at its Kansas City location.
R. Patt Lilly, president and chief executive officer at the St. Joseph Chamber of Commerce, indicated that they had tried to keep the employees in the Missouri/Kansas City area through “a very significant incentive package to keep the headquarters here, but when it was all said and done, they made the decision to go to Georgia.”
Boehringer says much of the decision was related to the Atlanta airport and the availability of direction international flights to Europe and other parts of the world.
“Even though 75 (positions) is not a large number,” Lilly said to News-PressNow, “it is certainly an issue with respect to the headquarters leaving, but we have the manufacturing here, the research and development as well as the distribution. And I expect those to grow over the next several years.”