French drug maker Sanofi-Aventis has agreed to pay A$560 million (US$544 million) to Primary Health Care for Australia's largest distributor of vitamin supplements, Primary said on Monday.
Primary, which acquired the asset after a A$2.7 billion takeover of medical testing group Symbion Health this year, said the sale of the unit, which it calls the consumer business, will help pay down debt it took on to fund the deal.
"The sale of the consumer business will allow Primary to continue its focus on operating its core businesses and progress with the integration of the Symbion business acquired in February," Primary Managing Director Edmund Bateman said.
The Australian Financial Review newspaper said on Monday that Sanofi-Aventis beat German drug maker Merck for the unit, which has assets including dietary supplement brands Bio-Organics, Cenovis, Nature's Own and Betadine.
Primary is accepting separate bids for its pharmacy business until Tuesday, which is expected to reap it more than A$500 million.
An industry source told Reuters last week that Swiss-based Zuellig Pharma, an Asia-focused healthcare distributor, was among the potential bidders for the business.
Another consortium is also expected to make a bid, a source close to the deal who did not want to be identified said on Monday.
"Primary continues to assess a number of options in relation to Symbion Pharmacy with a view of optimising value," Bateman said.
Grocery wholesaler Metcash dropped out of the bidding last week. Metcash had originally formed a joint venture bid with Sigma Pharmaceuticals, with Sigma chasing the consumer unit.
Shares in Primary closed Friday at A$4.75. The stock traded above A$8 in January.