The R1.3-billion transaction means that all three of the big listed pharmaceutical companies are now empowered - not bad for a sector that was accused of being lily-white just four years ago.

Commentators lauded Adcock's choice of partners for their depth and knowledge of healthcare, and that there would be more than 850000 beneficiaries.

The BEE consortium comprises Kagiso Trust Investments, a subsidiary of the Kagiso Trust, and Kurisani Youth Development Trust, the investment arm of LoveLife, the national HIV-prevention programme.

In terms of the deal, all employees, regardless of seniority, have the same stake in the group.

Adcock CEO Jonathan Louw said: "There's no white participation and employees get the same whether they are a factory worker or a senior executive."

The group's advisors, RMB, got 186 prospective applicants, who were then evaluated and streamlined over nine months.

The deal takes Adcock's BEE stake to 27% from 10% and the group's empowerment status is now level four, the same as Aspen Pharmacare.

Some analysts have questioned the structure of the lock-in period - employees must hold their shares for seven years - and that dividends accrued need to be invested back into the company.

The strategic partners are locked in for 10 years, but can sell after seven provided that they sell to an entity or individual with similar or better empowerment credentials.

Kate Turner-Smith, health-care analyst at Vunani Securities, said the lock-in was warranted from a company perspective as they were footing the bill for the deal.

"But from an employee perspective they derive no wealth creation benefits for at least seven years," she added.

Aspen Pharmacare, the largest pharmaceutical manufacturer in the country and the first to initiate a BEE deal, in 2002, was left with reduced empowerment shareholding in 2005 when cash-strapped Peu Health liquidated its holding early.

Aspen subsequently did another empowerment deal in 2005, the third, with Imithi Consortium, of which the lead participant is Cosatu-affiliated Ceppwawu Investments.

The R645-million deal was substantially financed by the IDC. It took Aspen's direct and indirect empowerment ownership to just above the 25% prescribed in the empowerment scorecard.

Some analysts have questioned whether Aspen faced further dilution when global pharmaceutical giant GlaxoSmithKline's 16% stake vests in the group in the next few weeks. But senior executive Stavros Nicolaou said the group would retain its empowerment ranking.

Empowerment credentials are not the determining factor for publicly listed pharmaceutical companies when it comes to state tenders.

This is because tender rules don't allow for any empowerment points for publicly listed companies.

But state tenders are highly sought after by industry players as they provide pharmaceutical operators with reliable, high-volume business. Moreover, there are no marketing costs involved.

"The real profit then comes from work from the private sector," said Turner-Smith.

The procurement mechanism has been criticised by some local manufacturers, as price is the biggest determinant. For instance, one of the TB tenders was given to an Indian company because it was cheaper than empowered South African companies.

Current empowerment deals in the pharmaceutical sector are driven by the lure of state tenders, as well as private hospital work, which demands the empowerment credentials of suppliers.

When these private hospitals buy from more empowered operators, it bolsters the hospital group's chances of obtaining hospital licences, and the prospect of working with the government in private-public partnerships.

Turner-Smith said it was difficult to determine the success of empowerment deals until they had matured.

"The government wants black participation and they're using tenders as a carrot," she said.

"Employees would like to see money in the pocket and financial freedom, but there's nothing until the lockout period is over. And shareholders don't want this to cost an arm and a leg."