Pfizer, Novartis, Abbott in race for Brazil’s Ache Laboratorios: report

Pfizer Inc, Novartis AG and Abbott Laboratories are bidding for Ache Laboratorios Farmaceuticos in an auction that may value one of Brazil's biggest drugmakers at more than $5 billion, Reuters today reported, citing people familiar with the matter

The three drugmakers are all weighing second-round bids that are due in April for privately-held company, controlled by the Dellape Baptista, Siaulys and Depieri families, the report said.

But the potential sale has already run into problems with disputes among the stakeholders, forcing British drugmaker GlaxoSmithKline to drop out of the bidding process last month.

The Baptista and Siaulys families are keen to divest their stake and have hired investment bank Lazard to evaluate a potential sale, while the Depieri family plans to hold on to its stake and is looking for local partners to buy out the holdings of the Baptista and Siaulys families.

The Depieri family is reported to have hired BTG Pactual to develop a new business plan for the company.

Founded in 1966, Aché Laboratorios has two industrial complexes, one in its headquarters in São Paulo and another one in the district of Jurubatuba.

It manufactures and promotes 260 prescription, generic and over the counter drugs in 605 different variants.

Although it is the fourth-largest in terms of overall Brazilian drug sales, it is the largest in prescription segment with a 41-per cent market share. Aché exports 40 drugs to 12 countries and had turnover of $ 1.5 billion in 2011.

Brazil, Latin America's largest economy has attracted global pharmaceutical companies because of its growing middle class that has strengthened the demand for health-care and drugs, which are expected to grow by double-digits annually over the next decade.

The health-care industry in Brazil is now consolidating due to overseas investor interest. Late last year, Minnesota-based UnitedHealth Group acquired Brazilian health insurer Amil Participacoes for $4.9 billion.

Early last month, US drugstore chain CVS Caremark acquired a controlling 80-per cent stake in Brazil's 44-store pharma chain Drogaria Onofre, for a reported $300 million,while Reckitt Benckiser agreed to pay Bristol-Myers Squibb $482 million to get marketing rights for several top-selling OTC drugs in Brazil, Mexico and other parts of Latin America (See: Bristol-Myers Squibb enters $482-mn Latin American deal with Reckitt Benckiser).