(Bloomberg) -- Italian drugmaker Angelini Pharma SpA is in talks on a potential combination with domestic peer Recordati SpA, which is backed by private equity firm CVC Capital Partners Plc, according to people familiar with the matter.
Angelini and Recordati have been discussing the possibility of a deal that would create a larger European generic drugmaker, said the people, who asked not to be identified as the information is private. Private equity suitors’ interest in Recordati has waned, the people said.
Bloomberg News reported in June that Angelini, KKR & Co., TPG Inc. and Advent International had been in the early stages of evaluating potential deals for Recordati. Angelini is still facing disagreements over valuation and future strategy, and there’s no certainty the negotiations will lead to a transaction, the people said.
Shares of Recordati have risen about 6% this year, giving the company a market value of about €10.8 billion ($11.4 billion). Representatives for Angelini, CVC and Recordati declined to comment.
A tie-up of Angelini and Recordati could create an Italian pharmaceutical powerhouse with products that cover treatments for mental health, epilepsy, cardiovascular illnesses and urological diseases as well as coughs and colds. Recordati recorded about €770 million of adjusted earnings before interest, taxes, depreciation and amortization last year, while Angelini had about €244 million of Ebitda during the period.
CVC bought its 51.8% holding in Milan-based Recordati in 2018 from the founding family in a roughly €3 billion deal.
Angelini, which was founded in the central Italian town of Ancona in 1919 by pharmacist Francesco Angelini, is known for making popular over-the-counter medications for pain relief. It currently operates 12 plants, half of which are in Italy.
--With assistance from Aaron Kirchfeld and Swetha Gopinath.
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