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December 15, 2015 By Mark Terry , BioSpace.com Breaking News Staff After weeks of hints and speculation that Paris-based Sanofi was considering spinning off its animal health unit, Merial , the company announced its plans—just not the way everyone expected. Sanofi announced today that it was entering into exclusive negotiations for a business swap with Ingelheim , Germany-based Boehringer Ingelheim . Sanofi would trade Merial for Boehringer Ingelheim ’s consumer healthcare (CHC) business. Merial has an enterprise value of €11.4 billion, and Boehringer ’s CHC has an enterprise value of €6.7 billion. Boehringer ’s CHC China business would not be part of the deal. In addition, Boehringer would pay Sanofi €4.7 billion. Merial employs 6,600 individuals and runs in more than 150 countries. It has three main segments, products for pets, farm animals and veterinary public health. “In entering into exclusive negotiations with Boehringer Ingelheim , we have acted swiftly to meet one of the key strategic objectives of our roadmap 2020, namely to build competitive positions in areas where we can achieve leadership,” said Olivier Brandicourt , Sanofi ’s chief executive officer, in a statement. “This transaction would allow Sanofi to become a world leader in the attractive non-prescription medicines market and would bring a complementary portfolio with highly recognized brands, allowing for mid and long term value creation.” The deal is expected to close in the fourth quarter of 2016. Sanofi hasn’t made any deals since 2011, when it acquired Genzyme for $20.1 billion. As part of the deal Sanofi ’s name brands Maalox and Lactacyd will become part of Boehringer ’s portfolio, which includes cough medicines Mucosolvan and Bisolvon. Sanofi gains a bigger market presence in Germany and Japan, two areas where it is currently limited. The combined animal health units will have annual sales of about €3.8 billion. Merial ’s bigger products include Frontline, Heartgard and GastroGard. Boehringer ’s products include Circoflex and Metacam. In 2011, Sanofi gave up on its plans to merge its animal health business with Merck & Co. ’s, indicating that it was too complex of a deal. This new deal has some similarities to last year’s asset swap between GlaxoSmithKline Plc and Novartis . That was part of a three-way deal in which GSK acquired Novartis ’s vaccines business, excluding influenza vaccines, the development of a consumer healthcare joint venture, and the sale of GSK ’s oncology portfolio related to research-and-development activities and rights to two AKT inhibitors to Novartis . Sanofi has also indicated that it will use cash from the deal to buy back shares. This, according to Reuters, will make “the planned transaction neutral to earnings in 2017 and accretive thereafter.” Brandicourt took over Sanofi in April of this year after the company’s chief executive officer, Chris Viehbacher , was ousted by the board. Analysts in general have been waiting for something dramatic from Brandicourt, and appear to have gotten their wish. “The new CEO has clearly started to put his stamp on the company,” analysts at Barclays wrote in a note, “and isn’t afraid or impeded from taking strategic action.” “ Boehringer Ingelheim ’s strategic priority is to focus on the company’s core areas of expertise and businesses with an established global scale, or where a pathway to a global scale can be achieved and prioritized among Boehringer Ingelheim ’s portfolio opportunities,” said Andreas Barner , Boehringer ’s chairman of the board, in a statement. “ Boehringer Ingelheim Animal Health is and will stay strongly committed to bringing novel, innovation driven solutions to veterinarians and animal owners. Our combined Animal Health business would be well positioned for growth and emergence as a leader globally.”