By Kosaku Narioka
Bain Capital is in talks to acquire Mitsubishi Chemical Group's pharmaceutical business in a potential multibillion-dollar deal, a person familiar with the matter said, a transaction that could accelerate the Japanese chemical giant's efforts to focus on key businesses.
The U.S. investment company is in the final stages of negotiations to buy the subsidiary, Mitsubishi Tanabe Pharma, for possibly more than 500 billion yen, equivalent to $3.21 billion, the person said.
Bain Capital has been riding a growing wave of Japanese mergers and acquisitions in recent years. The firm is competing with rival KKR to acquire software company Fuji Soft.
Chip maker Kioxia Holdings, which was bought for around $18 billion in 2018 by a group led by Bain Capital, made its trading debut in December following an $800 million initial public offering.
Mitsubishi Chemical has identified several focus areas, such as products to support vehicle electrification, chip-making and food production, as it shed a number of businesses over the past couple of years. The company said in November that it would look for the best partners for its pharmaceutical business in the long run.
Its pharmaceutical business accounted for about 10% of the company's revenue in the year ended March 2024.
Core operating profit from its pharma business is projected to increase 8.3% to Y61.0 billion for the fiscal year ending March, with revenue estimated to grow 6.4% to Y465.0 billion. Mitsubishi Tanabe's best-selling drugs include Radicava for amyotrophic lateral sclerosis, which competes with Biogen's Qalsody.
Japanese business daily Nikkei reported earlier that Mitsubishi Chemical had given preferential negotiation rights to Bain Capital for the potential sale of the pharmaceutical unit.
Mitsubishi Chemical in a statement said the company is discussing the ideal business portfolio for the entire company, including the pharmaceutical business, and is undergoing a portfolio revamp with all options in mind, including possible sales.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
01-21-25 0618ET