Chilean drugmaker CFR to raise $750 mn to fund Adcock Ingram acquisition

Shareholders of Chilean drugmaker CFR Pharmaceuticals SA yesterday approved a $750-million capital increase to help fund the company's proposed $1.3 billion acquisition of South Africa's second-largest pharmaceutical company Adcock Ingram Holdings.

Early this month, Santiago-based CFR, Chile's largest drugmaker, offered to buy Adcock Ingram for 73.51 rand per share in cash and stock.

CFR had said that the merger would create a company with annual revenue of about $1.3 billion, an asset base of approximately $2.1 billion, have a presence in more than 23 countries and employ more than 10,000 people.

But Adcock Ingram's largest shareholder, the Public Investment Corp, the South African government-employee pension-fund, has said that it would prefer a local company buying Adcock Ingram.

Johannesburg-based Adcock Ingram began as the EJ Adcock Pharmacy in Krugersdorp 120 years ago.  It was listed on the Johannesburg Stock Exchange (JSE) in 1950 before it became a wholly-owned subsidiary of Tiger Brands, and was subsequently delisted in 2000.

After the unbundling from Tiger Brands, Adcock Ingram re-listed on the JSE in 2008.