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CFR pharma expands global ambitions with Adcock bid Posted 02/08/2013

Chile-based CFR Pharmaceuticals (CFR) has plans to become a global drugmaker. In its latest efforts it has made a US$1.3 billion cash-and-share offer for South Africa’s second-largest generics drugmaker Adcock Ingram (Adcock).

The announcement by CFR on 3 July 2013 outlines the company’s aim to use this acquisition to strengthen its position as one of the emerging markets’ leaders in pharmaceuticals.

Under the terms of the non-binding offer CFR will acquire 100% of Adcock Ingram’s ordinary shares for a price of ZAR 73.51 per share, as well as making comparable offers to Adcock’s Black Economic Empowerment Partners, as holders of Adcock’s A and B shares, and the participants in the company’s employee and incentive schemes.

The combined company should be able to reduce costs by using excess manufacturing capacity and by transferring the manufacture of certain products to South Africa and India. Increased volumes and utilization rates are also expected to lead to reduced production costs.

CFR should give Adcock access to attractive new markets through its presence in Latin America as well as South East Asia. Adcock Ingram’s regional presence will give CFR access to the South African market and other markets in sub-Saharan Africa.

CFR intends for the two companies to capitalize on attractive emerging market opportunities by becoming a leader in emerging markets, including Africa, India, Latin America, and South East Asia. The combined company would have a presence in more than 23 countries with access to over two billion potential patients, employing more than 10,000 people and have revenues of approximately US$1.3 billion.

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Source: Adcock, CFR

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