SANOFI SNARES STERLING DRUGS

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The first gavel pounded last week in Eastman Kodak Co.'s $5 billion brand auction as Elf Sanofi agreed to acquire Sterling Winthrop's pharmaceutical business.

The deal's announcement came a day after initial bids were offered on Kodak's non-imaging businesses. The marketer put several units up for sale in May, including Sterling Winthrop's consumer health products, L&F Products' household cleaner brands and the Clinical Diagnostics division (AA, May 9).

Goldman, Sachs & Co., New York, is handling the divestitures.

Sanofi, already Sterling's partner in a global drug alliance, will give Sterling $1.675 billion in cash and the worldwide over-the-counter business from their venture.

The pharmaceutical products that Kodak is selling had $1.1 billion in sales last year. They include two injectable cardiac medicines and Talacen, a prescription analgesic.

Kodak has been insisting no units will be broken up in the sale and stressed the Sanofi deal will allow the Sterling Winthrop OTC business to be sold as a whole. But analysts expect a brand by brand divestiture.

"It's probably more profitable for Kodak that way, and I can't think of any companies that would be interested in or benefit from buying a whole company," said one executive close to Kodak.

Still, Procter & Gamble Co. is investigating both Sterling Winthrop and L&F. P&G is now rolling out its first major analgesic, Aleve, and is attracted to Sterling's Bayer line.

Bayer AG, Warner-Wellcome, and Johnson & Johnson are said to be other bidders for Sterling's analgesics.

L&F suitors include Kimberly-Clark Corp. and a private-label manufacturer for the baby wipes business, and Colgate-Palmolive Co. and Reckitt & Colman.

Kodak and its subsidiaries declined to comment on bidders.

BBDO Worldwide, New York, handles the $65 million global Bayer business; Ammirati & Puris has Midol menstrual pain reliever and Phillips' laxative; and Lintas has the $40 million Lysol disinfectant account.

Riccardo A. Davis contributed to this story.

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