In order to boost their profile in Japan's fast-growing generic drug market, Sanofi-Aventis and Nichi-Iko Pharmaceutical announced on May 28 a joint venture.
The partnership will give Sanofi-Aventis, the world's sixth largest pharmaceutical group, access to a market set to benefit from a government target to nearly double the use of generic drugs to 30% by 2013.
The venture, which will be known as Sanofi-Aventis Nichi-Iko once set up in June, will be 51% held by the French firm's Japanese unit and 49% by Nichi-Iko. It will be headquartered in Tokyo.
The deal will see Nichi-Iko issue 4.4 billion yen (US$48.2 million) worth of shares to Sanofi-Aventis at 2,894 yen per share in June, giving the French giant a 4.66% stake in its Japanese partner.
The market is still underdeveloped in Japan and soaring healthcare costs driven by an ageing population have prompted the government to work towards expanding their use.
Competition is intensifying with other pharmaceutical companies in Japan looking to boost sales of generics including Daiichi Sankyo, which owns 64% of India's top generic maker Ranbaxy Laboratories.
Copyright Agence France-Presse, 2010