GSK eyes push into emerging markets through Asken buy

GlaxoSmithKline Plc (GSK), one of the world's leading research-based pharmaceutical and healthcare companies, is planning to take more than 20 per cent stake in South African generic drug maker Aspen Pharmacare.

However, Aspen cautioned its shareholders to stay calm as the news spread that GSK is swapping assets for Aspen shares and buying additional Aspen stock in the market or from the company.

"Shareholders are advised to continue exercising caution when dealing in Aspen's securities until a further announcement is made," the company said in a brief statement that did not offer further detail on the nature of the negotiations.

At Aspen's market cap of $1.8 billion as on Thursday, the deal would be worth some $180 million to $450 million. The transaction is expected to be completed in the coming weeks.

While GSK will have to make an open offer to Aspen's minority shareholders if the stake exceeds 35 per cent, marketmen do not expect the acquisition to top 20 per cent of Aspen's equity capital.

Aspen, however, is a strategic acquisition for GSK as it would give it a business that is growing quickly and an entry into the emerging markets in Africa.