Indian manufacturer will gain scale, additional products and enhanced market share
Indian generics manufacturer Aurobindo Pharma is to acquire Actavis' generics commercial operations in seven markets in Western Europe. The €30m (US$41m) deal is subject to certain antitrust approvals and completion of employee consultation processes.
Aurobindo expects to acquire Actavis' pharmaceutical commercial infrastructure in France, Italy, Spain, Portugal, Belgium, Germany and the Netherlands, including staff, products, marketing authorisations and dossier license rights. The two companies will also enter into a long-term strategic supply arrangement to support the ongoing growth of these businesses.
The acquisition expands Aurobindo’s front-end operations into five segments (generics, prescription products, over-the-counter products, hospital products and generics tenders) with approximately 1,200 products and an additional pipeline of more than 200 products.
Aurobindo estimates that net sales for the acquired businesses were around €320m in 2013 with a growth rate of over 10% year-on-year. Although these businesses are currently loss-making, the company expects them to return to profitability in combination with its vertically integrated platform and existing commercial infrastructure.
We have been clear about our intention to focus on growth initiatives in Europe and international markets
Aurobindo claims the acquisition will make it one of the leading Indian pharmaceutical companies in Europe. Since 2006 it has been steadily expanding its European footprint through an increasing presence in the UK, Spain and Germany.
V Muralidharan, SVP of European Operations for Aurobindo, said the acquisition of these European businesses is 'a value enhancing and forward-looking initiative' for Aurobindo.
'We have been clear about our intention to focus on growth initiatives in Europe and international markets, which together are expected to be key drivers for future growth,' he said.
'This transaction will complement our strategy of pursuing organic growth along with value-creating acquisitions within our served markets and adding complimentary growth platforms to provide scale and revenue diversity.'
Sigurdur Oli Olafsson, President, Actavis Pharma, which has its global headquarters in Dublin, Ireland and US administrative headquarters in Parsippany, NJ said: 'The value created by the commercial operations in these seven markets will be better maximised by Aurobindo, which will gain scale, additional products and enhanced competitive market share position as a result of this transaction.'
He added: 'This transaction will permit Actavis to focus management time and resources to support accelerated investment in driving faster growth of other markets, including Central and Eastern Europe and Southeast Asia.'
Until the transaction is completed, Actavis says it will be business as usual, and it will provide full support to manage the business, introduce new products and maximise its partnership with customers.