AstraZeneca Turns to Auction to Unload Device, Dental Business

In an effort to focus solely on its core medicine business, pharmaceutical giant AstraZeneca has begun a $2.1 billion auction of Astra Tech Inc., its dental implants and medical devices division. The move is in direct opposition with competitors such as Novartis International AG and GlaxoSmithKline plc, which are diversifying their market opportunities.

More than ten companies have submitted bids for Mölndal, Sweden-based Astra Tech, which makes catheters and breathing aids as well as dental devices. Bidders include private equity firms Bridgepoint and Cinven, both based in London, England, and PAI Partners of Paris, France. Private equity investment firm Warburg Pincus of New York, N.Y., and orthopedic manufacturing conglomerate Zimmer Holdings Inc. of Warsaw, Ind., also placed bids. Some companies only are interested in dental implants, while others are interested strictly in medical devices.

Last year, AstraZeneca appointed JP Morgan Chase & Co. to conduct a strategic review of its Astra Tech division. JP Morgan is offering financing to bidders; second-round bids are expected toward the end of May.

AstraZeneca paid $1.1 billion in a settlement of protracted dispute with British and U.S. authorities last month. The company had set aside $2.3 billion for this potential liability, meaning profit targets for the year could be lifted by nearly 7 percent.