Abbott to acquire Chile's CFR Pharmaceuticals in a $2.9 bn deal
17 May 2014
US drug giant Abbott Laboratories yesterday struck a deal to acquire Chile's CFR Pharmaceuticals SA in a $2.9-billion deal, the latest in a series of recent deals announced in the global pharmaceutical market.
This would be Abbott's first multi-billion dollar deal after it spun off some of its research-based pharmaceuticals business last year into a new company called AbbVie Inc.
The deal also comes a year after CFR, 72.62-per cent controlled by the family of Alejandro Weinstein, withdrew its $1.3-billion takeover offer for South African drug maker Adcock Ingram. (See: Chilean drug maker CFR threatens to withdraw $1.3 bn bid for Adcock Ingram)
Under the deal, Abbott will buy the Weinstein family's stake held by their holding company Kalo Pharma Internacional S.L., for 34.65 cents per share, or about 190.54 Chilean pesos, a 53 per cent premium to CFR's yesterday closing price on the Santiago Stock Exchange.
Abbott said that it will conduct a cash tender offer for the remaining shares of CFR before 3 November and the deal also includes taking on CFR's debt of about $430 million.
CFR, Chile's biggest drugmaker, sells a range of generic and branded drugs and injectables for women's health, heart and respiratory diseases in 15 countries across Latin America including Chile, Peru, Argentina and Colombia, as well as in Vietnam, Canada and the UK.
Colombia is CFR's largest market, accounting for 30 per cent of its annual revenue of $767.9 million, followed by Chile with 21 per cent and Peru with 16 per cent.
CFR, founded by Nicolas Weinstein, the son of Ukrainian immigrants, markets more than 1,000 products and employs over 7,000 people including 2,000 sales representatives.
Illinois-based Abbott said that the acquisition will allow it to expand its portfolio across the Latin American pharmaceutical market, which is expected to reach $73 billion in sales this year, and $124 billion by 2018.
"With its scale and leadership positions in the region, strong commercial and development organizations, well-respected leadership team and a trusted portfolio of recognized brands, CFR is one of the leading branded generic companies in Latin America," said Miles White, chairman and CEO of Abbott.
"This acquisition will significantly enhance and broaden Abbott's Latin American footprint, and is well aligned with our long-term strategy and commitment to fast-growing markets," he added.
Abbott expects the acquisition to add approximately $900 million to its sales in the first full year (2015), with expected double-digit sales growth over the next several years.
