June 2, 2011 / 3:10 PM / 8 years ago

Field narrows for AstraZeneca unit sale: sources

LONDON (Reuters) - Swiss dental implant makers Straumann (STMN.S) and Nobel Biocare NOBN.VX are out of the race for AstraZeneca’s (AZN.L) rival business, leaving a reduced field of bidders, people familiar with the situation said.

Drugmaker AstraZeneca is looking to sell Astra Tech, its Molndal, Sweden-based maker of dental implants and medical devices, which it hopes could fetch around $2 billion.

Second round bids are due on June 6, the people said.

A spokesman for Nobel Biocare confirmed that the group is no longer interested in acquiring Astra Tech’s business. Straumann declined to comment.

The auction process, run by JPMorgan (JPM.N), attracted widespread initial interest, with medtech companies and private equity firms invited to bid for either Astra Tech’s dental implant business, the medical devices arm, or the business as a whole.

Astra Tech, which had revenues last year of $535 million, is the world’s third largest dental implants maker after Straumann and Nobel Biocare. It has a separate medical devices arm focused on urology and surgery.

The departure of Straumann and Nobel Biocare from the process leaves U.S. medical firms Zimmer ZMH.N and Dentsply (XRAY.O) potentially interested in acquiring the dental part of the business, sources said.

It is unclear whether industrial-to-life sciences group Danaher (DHR.N) also remains interested in that part of the business.

Private equity firms Bridgepoint BRDG.UL, Cinven CINV.UL and PAI all intend to bid for the medical devices business, sources said.

EQT, the Swedish private equity firm backed by the Wallenberg family, is expected to bid for the whole business, some of the people said.

It is unclear whether Warburg Pincus WP.UL remains interested in all or part of the business.

AstraZeneca CEO David Brennan told the Reuters Health Summit last month there had been “a lot of interest” in Astra Tech, adding that the dental implant business had come back strongly following a slowdown during the economic recession.

A company spokeswoman reiterated on Thursday that AstraZeneca was continuing to evaluate all alternatives for maximizing value from the business.

EQT was unavailable for comment. The other private equity firms involved declined to comment.

Unlike some of its rivals, such as GlaxoSmithKline (GSK.L), Novartis NOVN.VX and Sanofi (SASY.PA), AstraZeneca has chosen to focus on its core pharmaceuticals business rather than pursuing a policy of diversification, making Astra Tech non-core.

The sale of Astra Tech also highlights AstraZeneca’s current focus on boosting returns to shareholders as it heads into a wave of patent expiries on some of its biggest selling medicines including Nexium, for heartburn and stomach ulcers, and Seroquel for schizophrenia and bipolar disorder.

AstraZeneca earlier this year announced a doubling of its 2011 share buyback program to $4 billion.

Additional reporting by Victoria Howley; Editing David Cowell

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