Aurobindo Pharma and Auro Pharma announced the signing of a binding offer to acquire commercial operations in seven Western European countries from Actavis plc. Closing of the transaction is conditional on certain antitrust approvals and completion of employee consultation processes.
Aurobindo expects to acquire personnel, commercial infrastructure, products, marketing authorisations and dossier license rights in seven European countries. Actavis and Aurobindo will be entering into a long term commercial and supply arrangement in order to support the ongoing growth plans 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 1200 products and an additional pipeline of over 200 products.
Management estimates the net sales for the acquired businesses would be around EUR 320 million in 2013 with a growth rate of over 10 per cent year-on-year. Although these businesses are currently loss-making, Aurobindo expects them to return to profitability in combination with its vertically integrated platform and existing commercial infrastructure. The acquisition will make Aurobindo one of the leading Indian pharma companies in Europe. The acquisition will enable Aurobindo to achieve critical mass in Western Europe with a top 10 position in several key markets.
V Muralidharan, Senior Vice President 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. ”
Arvind Vasudeva, Chief Executive Officer, Aurobindo’s Formulations Business further stated that, “We have carefully reviewed the Actavis European operations and concluded that with our cost competitiveness and group structure, we could significantly capitalise Actavis’s strong market position in these Western European countries and improve profitability.”
Aurobindo looks forward to the opportunities this transaction provides for us to work even more closely with Actavis, who are one of our existing strategic partners”.
Sigurdur Oli Olafsson, President, Actavis Pharma said, “We believe that the value created by the commercial operations in these seven markets will be better maximised by Aurobindo.”
EP News Bureau – Mumbai
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