Proceeds of Kodak sell-off to reduce dollars 7bn debt

NEW YORK - The flurry of activity in the healthcare sector continued with Kodak putting its Sterling Winthrop drugs group and a raft of other 1980s acquisitions up for sale, writes Larry Black. Kodak said it planned to refocus on its core 'imaging' business and reduce its dollars 7bn debts.

Sterling, acquired in a dollars 4.6bn bidding war with Roche Holdings in 1988, will be sold, along with its L&F personal and household products subsidiary and Clinical Diagnostics division. The businesses account for dollars 3.7bn of Kodak's annual revenues.

Elf Sanofi, the French personal care group with an international marketing agreement with Sterling Winthrop, expressed interest in its European over-the-counter drugs business and prescription pharmaceuticals. Elf Sanofi, 40 per cent owned by the Elf Aquitaine oil company, has right of first refusal to Kodak's share of the alliance.

Bayer, the German group, also said it might be interested in acquiring the entire group, while Roche, which announced a dollars 5.3bn takeover of California's Syntex Corp, said it had 'closely followed' Kodak's decision to sell the company it pursued six years ago.

The decision by Kodak's chief executive, George Fisher, hired from Motorola last December to replace the controversial Kay Whitmore, was widely welcomed by Wall Street analysts, who have complained that the company's breadth and debt-load has hurt its ability to compete against rivals such as Japan's Fuji and generic-label products.

Its shares first surged late on Monday on rumours of the sale, gaining more than 10 per cent to dollars 461 2 by late yesterday.

Kodak faces a big challenge in staying at the forefront of the photography business, which is changing rapidly with the spread of digital technology. Kodak's new strategy will focus on what it called the 'five links of the imaging chain': image capture, processing, storage, output and delivery.