Aurobindo Pharma to buy Actavis' loss-making operations in 7 EU nations

Drug maker Aurobindo Pharma has agreed to buy Dublin-based Actavis Plc’s commercial operations in seven western European countries for about 30 million euros, in a bid to increase its international footprint.

Aurobindo said the deal would include commercial infrastructure, products and marketing authorisations in the seven countries. The two companies will also enter a long-term commercial and supply deal to support the growth plans of the businesses.

Closing of the transaction is conditional on certain anti-trust approvals and completion of employee consultation processes, Aurobindo said in a statement, without disclosing the financial details of the deal.

Although the businesses are currently loss-making, Aurobindo expects them to return to profitability in combination with its vertically integrated platform and existing commercial infrastructure, the company said in a statement, without disclosing the financial details of the deal.

“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 percent year-on-year. 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, senior vice-president of European operations for Aurobindo, said the acquisition was 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,” Muralidharan said.

Sigurdur Oli Olafsson, president of Actavis, said the value created by the commercial operations in these seven markets would be better maximised by Aurobindo, which will gain scale, additional products and market share.

Agencies