Thermo Fisher, Celltrion, KKR, and Carlyle Vie for Baxter's $4B BioPharma Solutions Business

On March 20, 2023, according to a report by Reuters citing sources familiar with the matter, Thermo Fisher Scientific and South Korea's Celltrion are competing to acquire Baxter's biopharma solutions business.

The sale is expected to generate more than $4 billion in proceeds for Baxter, which will help address the debt from its $10.5 billion acquisition of Hill-Rom Holdings. By the end of 2022, Baxter's total market value was $19 billion, with total liabilities reaching $16.6 billion and cash and cash equivalents at $1.6 billion.

Informed sources revealed that KKR and Carlyle are also interested in this acquisition, and there may be other potential bidders as well.

The source requested anonymity as the matter is confidential. Baxter, Thermo Fisher Scientific, and KKR declined to comment. Celltrion and Carlyle did not immediately respond to requests for comment.

But in a securities filing published on Tuesday, South Korea's Celltrion confirmed that it had indeed reviewed a potential acquisition of Baxter's BioPharma Solutions business "to secure stable global production facilities," but "the acquisition has not been finalized."

In January this year, Baxter stated that it was exploring alternatives for its biopharmaceutical solutions business and would spin off its renal care division. (See: Baxter Plans to Spin Off Part of Its Renal Care Business)

As part of the reform, Baxter announced in February this year a plan to cut up to 5% of its workforce, which is expected to save more than $300 million by 2023. This is a special measure taken after Baxter recorded a net loss of $2.4 billion in 2022.

Over the past decade, Baxter has narrowed its focus. In 2014, Baxter sold its marketed vaccine portfolio, including meningitis and tick-borne encephalitis vaccines, to Pfizer. In 2017, Baxter acquired Claris Injectables to expand its generic injectable drug portfolio, but spun off its biopharmaceuticals division to Baxalta in 2015.

Baxter's biopharma solutions business supports pharmaceutical manufacturers in formulating, developing, and commercializing drugs that are typically administered through infusion or injection, such as biologics and vaccines.

Baxter's biopharmaceutical solutions business generated $644 million in revenue in 2022, accounting for approximately 4% of the entire company.

Thermo Fisher Scientific is one of the largest scientific equipment suppliers globally and has been making acquisitions in recent years to expand its offerings in contract research and manufacturing, including the $5.2 billion acquisition of Patheon NV in 2017 and the $17.4 billion acquisition of PPD Inc. in 2021.

Seo Jung-Jin, the co-founder and chairman of Celltrion, ranks as the second-richest individual on the 2019 Forbes Korea Rich List. Celltrion is a South Korean company primarily engaged in biosimilars and biologics CDMO.

In 2020, this South Korean company announced an investment of $453 million to establish a new production base and R&D center in South Korea, aiming to strengthen its biologics capabilities. Driven by the growth of biosimilars, Celltrion, Inc. achieved a record-high revenue last year, reaching 2.3 trillion Korean won ($1.75 billion).