Aug. 24 (Bloomberg) -- Warner Chilcott Ltd., a maker of birth-control pills and acne medication, plans to buy Procter & Gamble Co.’s prescription-drug business for about $3.1 billion, according to a person familiar with the matter.

A group of banks will provide about $4 billion in financing for the deal, including about $1 billion to finance Warner Chilcott debt, said the person, who asked not to be identified because the talks are private and a deal hasn’t been announced.

Procter & Gamble, based in Cincinnati, has spent months looking for a buyer for the unit, whose main drugs treat bone loss, digestive disorders, and women’s health. The price is at the low end of the $3 billion to $4 billion range that Ali Dibadj, an analyst at Sanford C. Bernstein & Co., predicted in February for the sale.

“There is encroachment on their products from generic drugs and other competitive products, which may have depressed the price,” Dibadj said about the P&G unit in an interview yesterday. He rates Procter & Gamble “market perform.”

Rochelle Fuhrmann, an investor relations representative for Ardee, Ireland-based Warner Chilcott, did not return a telephone call seeking comment.

“We have said publicly that we will look at all options to maximize the shareholder value of our pharmaceuticals business,” said Tom Millikin, a Procter & Gamble spokesman. “This includes continued operation of our strong and profitable business, as well as a divestiture of some or all of our pharma assets.” He declined to discuss the transaction.

The Wall Street Journal reported yesterday that an announcement on the transaction may come as soon as today.

Four Largest Shareholders

A group of private-equity firms, including Bain Capital LLC, Thomas H. Lee Partners LP, and the buyout units of JPMorgan Chase & Co. and Credit Suisse Group bought Warner Chilcott in 2005 and sold stock in an initial public offering in 2006.

They remain the firm’s four largest shareholders, with control of more than half the shares, according to Bloomberg data. JPMorgan has since spun off its buyout fund, now known as CCMP Capital Advisors LLC.

JPMorgan and Bank of America Corp. are leading the group providing financing for the transaction, said another person with knowledge of the deal.

Warner Chilcott specializes in women’s health care and dermatology products for the U.S. drug market. The company makes the Estrostep Fe birth-control pill and Doryx, an acne treatment.

$19 Billion in Sales

The approval process for drugs has become more complex, making investments in pharmaceuticals less profitable, Procter & Gamble’s then-Chief Executive Officer Alan Lafley said in December. The health and well-being business, which includes pharmaceuticals, had about $19 billion in sales last year and represented about 24 percent of profit, the company has said.

The drugs unit makes Actonel, an osteoporosis drug, and Asacol, a colitis treatment, according to the Procter & Gamble Web site. Procter & Gamble hired Goldman Sachs Group Inc. to find a buyer for the unit, a person with knowledge of the matter said earlier this year.

Procter & Gamble climbed 56 cents to $53.58 Aug. 21 in New York Stock Exchange composite trading. The shares have declined 13 percent this year. Warner Chilcott rose 49 cents, or 3.2 percent, to $16.06 on the Nasdaq Stock Market Aug. 21.

To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net

Last Updated: August 23, 2009 21:23 EDT