Aurobindo acquires Apotex's business in 5 European countries for €74 mn
16 July 2018
Aurobindo Pharma on Saturday said it has signed a definitive agreement to acquire Canadian pharmaceuticals company Apotex International Inc's commercial operations and certain supporting infrastructure in five European countries for €74 million (Rs593 crore) in an all-cash deal.
Aurobindo's step-down subsidiary Agile Pharma B V (Netherlands) signed the agreement to acquire Apotex’s commercial operations across five European countries, including the Netherlands, Poland, Spain, Czech Republic and Belgium, the company said in a statement.
Hyderabad-based Aurobindo Pharma said the acquisition is in line with its strategy to strengthen and grow its European business and to expand in Eastern Europe.
The acquisition will add over 200 generics and more than 80 over-the-counter products that had total sales of €133 million in the year ending March 2018 and diversify Aurobindo’s European product portfolio, says the release.
Aurobindo reported sales of €577 million in Europe last fiscal, recording a 33-per cent year-on-year rise in sales in the EU market.
"This acquisition is a key step towards our goal of becoming one of the leading generics companies in Europe," V Muralidharan, senior vice-president of European operations for Aurobindo, said.
Although some of these businesses being acquired are currently loss-making, Aurobindo "expects them to return to profitability when combined with its vertically integrated platform and existing commercial infrastructure".
The acquisition also includes a manufacturing facility in Leiden in the Netherlands, with capabilities across manufacturing and packaging and a capacity of 1.8 billion tablets per annum. The company expects to close the deal in three to six months.
With the acquisition Aurobindo will be able to improve its market access in the Netherlands, Poland, Spain, Czech Republic and Belgium, besides adding a quarter of its existing European revenues in the form of Apotex's sales.
Aurobindo has been expanding its European footprint since 2006, both organically and via acquisitions in some of the key markets, including the acquisitions of Actavis's commercial operations in seven Western European countries in 2014 and Generis Farmaceutica in Portugal in 2017.
Its current European business covers nine countries, including the UK, France and Belgium, and involves government business, tender generics, branded generics and hospital generics segments.
In Poland, Aurobindo will add significant sales based on the established brand name APO as well as a dedicated sales force covering physicians and the pharmacy network.
"In Poland and Czech Republic, Aurobindo will become one of top 15 generics companies in each country. In Netherlands, the acquisition will lead to Aurobindo becoming a leading OTC company by volume, in Spain it will strengthen the company's position in the generics market and in Belgium, the acquisition will provide Aurobindo with an entry into the retail generics space, where it will become a top 5 player," the company said.
Europe with its $35 billion generics market is the third largest market for Indian drug makers after the US and Africa.