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News > International
Zeneca unit on the block
November 12, 1998: 10:41 a.m. ET

U.K. pharmaceuticals maker selling its specialty chemicals business
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LONDON (CNNfn) - U.K. pharmaceuticals maker Zeneca joined the shake-up in the global chemicals industry Thursday when it put its specialties unit up for sale.
     News of the proposed sale boosted Zeneca's shares to £22.80 each in London, a rise of 1 percent, after falling to £22.07 earlier in the day.
     The unit has annual sales of about £800 million $1.328 billion), and analysts expect it to fetch a price of around £1.6 billion ($2.656 billion).
     "The timing of the announcement is a surprise," admitted Desdner Kleinwort Benson analyst Peter McDougall, although he agreed it was a logical move.
     He added: "Why keep a business with a 10 percent margin when your more important pharmaceutical activities generate margins of 28 percent?"
     Other analysts said the sale could mean Zeneca is clearing the decks for a bigger deal with another pharmaceuticals company. Rumors of mergers with a larger pharmaceuticals company have swirled round Zeneca for a long time.
     "Conditions in the chemicals industry are tough," said one analyst, "and we're at the top of the M&A cycle."
     Zeneca's announcement comes only a few days after Swiss chemical giants Clariant and Ciba Specialty Chemicals agreed to merge in a $15 billion deal.
     Zeneca told analysts it wants to sell the specialties unit in one go, although some observers say there is the possibility of a management buyout, or a piecemeal sale of the different parts.
     Zeneca, the U.K.'s third-largest pharmaceuticals company, was spun off from ICI in 1993.
     In 1997, the company reported annual sales of $8.6 billion. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.