SmithKline Beecham last week said it will pay $2.9 billion for Eastman Kodak Co.'s Sterling Winthrop unit, a maker of over-the-counter drugs.
The deal is only one example of continued consolidation in the drug industry. A Miami-based holding company, Ivax Corp., will acquire Zenith Laboratories, a generic-drug company, in a $593.7 million stock swap. Indianapolis-based Bindley Western Industries will buy a privately held drug distributor for an undisclosed amount. Finally, Kansas City, Mo.-based Marion Merrell Dow hired investment bankers to help it evaluate various options.
SmithKline's purchase of Sterling Winthrop will double its annual over-the-counter drug sales to $2 billion. It will give the London-based company total annual revenues of about $7 billion.
Rochester, N.Y.-based Eastman Kodak already sold the unit's prescription-drug business to Sanofi of France for $1.7 billion.
SmithKline's purchase of Sterling Winthrop expands its presence in such markets as Australia, France and Italy. In May, SmithKline paid $2.3 billion for Diversified Pharmaceutical Services, a company that manages prescription drug benefits for health plans (May 9, p. 16). It could sell many of its products through Diversified.
Meanwhile, Ivax's acquisition of Northvale, N.J.-based Zenith potentially will improve its ability to bargain with managed-care companies and hospital purchasing groups. Broader product lines help companies take advantage of many groups' desire to make more of their purchases through fewer companies.
Ivax subsidiaries make and distribute intravenous products and generic and over-the-counter drugs. Its acquisition of Zenith will give it total annual revenues of $1.2 billion.
The SmithKline and Ivax transactions are expected to be completed in 1994, pending regulatory and antitrust reviews.
Bindley Western, a drug wholesaler, expects to complete its purchase of Kendall Drug Co. in October. Shelby, N.C.-based Kendall had revenues of $110 million last year from drug distribution to hospitals and government agencies in five Southern states. Bindley Western has annual revenues of about $4 billion.