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Kodak to Sell Remaining Sterling Winthrop Unit : Drugs: SmithKline Beecham will buy the consumer health products business for $2.925 billion.

August 30, 1994|From Associated Press

NEW YORK — Eastman Kodak Co. announced Monday that it has agreed to sell its remaining Sterling Winthrop business, including non-prescription remedies such as Bayer aspirin, to health care giant SmithKline Beecham for $2.925 billion in cash.

The sale is among the latest in the consolidation of the health care industry, where companies are merging to gain products and cut costs as changes cut deeply into profits.

In another deal announced Monday, Ivax Corp., the world's biggest distributor of generic drugs, said it will acquire rival Zenith Laboratories Inc. for $612.5 million.

For Kodak, the deal is part of the company's previously disclosed plans to shed assets and concentrate on its core business of photography and imaging.

SmithKline Beecham said the deal is designed to make it the world leader in over-the-counter medicines.

Rochester, N.Y.-based Kodak had previously announced it was selling Sterling's pharmaceutical business to Sanofi of France for $1.675 billion in cash and Sanofi's interest in a consumer health products joint venture.

Both transactions are subject to regulatory review.

Sterling Winthrop's global consumer health products business generated more than $1 billion in revenue for 1993. SmithKline already has a $2-billion consumer health products business.

The Sterling businesses going to SmithKline Beecham also include Panadol analgesics, Phillips Milk of Magnesia, Valda products for coughs and colds and Stri-Dex skin treatments.

SmithKline Beecham, based in London with U.S. headquarters in Philadelphia, already sells products in some of those categories: Ecotrin analgesics, Tums antacids, Contac cough and cold remedies and Oxy skin products.

Kodak is also looking for buyers for the two divisions of its L&F Products business. L&F's household products division makes Lysol disinfectant and Resolve carpet cleaner. Its do-it-yourself business sells products including Thompson's Water Seal, Red Devil paint and Formby's furniture refinisher.

Kodak jumped $1.375 to $50.75 in New York Stock Exchange trading; SmithKline's U.S. shares added 37.5 cents to $35.125.

In the Ivax-Zenith deal, the stock-swap transaction would merge two intensive competitors and add to Ivax's substantial drug lineup.

Ivax, a Miami-based holding company with subsidiaries that make personal care products and pharmaceuticals, earned $81 million on revenue of $976.1 million in 1993. Its Goldline Laboratories unit makes about 700 prescription and over-the-counter generic drugs.

Zenith, based in Northvale, N.J., makes 36 drugs. Last year the company earned $18.4 million on revenue of $96 million.

Zenith surged 81 cents to $23.06; Ivax lost 62.5 cents to $19.75. The companies expect to complete the deal in the fourth quarter.

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