The M&A wave has arrived in Chile
The global pharmaceutical sector continues to witness significant mergers and acquisitions activity, with 122 M&A deals completed in 2013. This trend has continued due to several multi-billion dollar deals around the world in 2014, which is already recorded the busiest year for healthcare acquisitions.
In Chile, the dealmaking sweeping started in December 2013 when Grünenthal Group, an international research-based pharmaceutical company headquartered in Aachen, Germany, completed the acquisition of Andrómaco Laboratories. Grünenthal accepted the public tender offer with respect to the acquisition of all issued and outstanding shares of Andrómaco.
“Through this acquisition, Grünenthal gets propelled from being a mid-size company, to one of the top four players in the Chilean market,” says João Simões, Head of Integration at Grunenthal Chile.
“The acquisition has been a major step in Grünenthal’s growth strategy and has almost doubled its revenues up to $450 million in Latin America.”
In the words of Grünenthal Group’s CEO, Professor Dr. Eric-Paul Pâques: “With Empresas Andrómaco, we acquire the best regional company to complement our own business and our therapeutic areas in the Andean countries and Central America.”
Another deal in the healthcare sector is the acquisition of two major retail pharmacy networks in Latin America. In May 2014 Alliance Boots, a multinational pharmacy-led health and beauty group, signed an agreement to acquire Farmacias Ahumada. The acquisition comprises two main businesses, which together operate over 1,400 stores, with combined revenues of around USD 1.4 billion. Farmacias Benavides is the third largest retail pharmacy chain in Mexico with around 1,000 stores, and Farmacias Ahumada is one of the three largest retail pharmacy chains in Chile with around 400 stores.
The latest move in a series of multi-billion dollar deals is the acquisition of CFR Pharmaceuticals by Abbott Laboratories. The largest maker of heart stents and adult nutritional beverages joined the wave of mergers and acquisitions with a USD 2.9 billion agreement to acquire Chile’s biggest drugmaker. Santiago-based CFR sells a range of products for women’s health, heart and respiratory diseases in 15 markets across Latin America. The deal will more than double its branded generic drug business in Latin America and establish the company among the top 10 pharmaceutical companies in the region.
The deals come as companies in the healthcare sector face slowing sales growth in the US and Europe while the market in Latin America is growing two to three times faster.
Article by Martijn Jimmink