Hyderabad, Jan 18 (PTI) Generic drug maker Aurobindo Pharma has signed a binding offer agreement to acquire commercial operations of Dublin-based Actavis plc in seven Western European countries.
Closing of the transaction is conditional on certain anti-trust approvals and completion of employee consultation processes, Aurobindo said in a statement today, without disclosing the financial details of the deal.
Aurobindo expects to acquire personnel, commercial infrastructure, products, marketing authorisations and dossier licence 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 statement said.
"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 over 200 products," it said.
Management estimates the net sales for the acquired businesses would be around 320 million euros 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.
Aurobindo expects the acquisition to help expand its operations to achieve critical mass in Western Europe with a top 10 position in several key markets.
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.
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, Muralidharan said.
Sigurdur Oli Olafsson, President of Actavis Pharma, 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.
Jefferies International Limited acted as sole financial advisor and Herbert Smith Freehills LLP acted as legal counsel to Aurobindo. Rothschild and Latham and Watkins acted as sole financial adviser and legal counsel to Actavis, respectively.