CFR Pharmaceuticals, Chile's largest drugs maker, has agreed to pay R12.6-billion in cash and shares for Adcock Ingram Holdings after months of negotiations.
The company beat a number of suitors which had knocked on the door of the South African pharmaceutical giant.
CFR will settle between 51% and 64.3% of the purchase price through cash and the balance through new CFR shares, the companies saidyesterday. The transaction equates to R73.51 per Adcock share.
The deal "will create a uniquely diversified emerging markets pharmaceuticals company with listings in Santiago and Johannesburg, targeting a market of [more than] two billion patients across Latin America, Africa, Southeast Asia and India," the companies said.
CFR is seeking to expand in emerging markets.
The Chilean company fended off competition from London-based private equity firm Actis LLP and Bidvest Group, the South Africa-based food and car sales company, in agreeing to buy Adcock, the maker of drugs including Panado painkillers.
CFR, which listed stock in Santiago in 2011, bought Laboratorio Franco Colombiano Lafrancol SAS in December for $560-million, giving it the biggest share of the Colombian market.
The transaction will allow CFR to make cost savings worth at least $440-million, according to the two companies.
Adcock Ingram will generate as much as 40% of the group's combined revenue.
CFR plans a secondary listing on the bourse, the companies said.
CFR will transfer "manufacturing capacity to South Africa, preserving and growing jobs and maintaining Adcock Ingram's commitment to broad-based black economic empowerment," it said.
South Africa's government pension fund and Adcock's biggest shareholder - the Public Investment Corporation - said in July it would prefer a local buyer of the company
Adcock's shares rose by 3.3% to R68.16 yesterday afternoon.
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