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Abbott
today
announced a definitive agreement to acquire Latin American pharmaceutical
company CFR Pharmaceuticals, more than doubling its Latin American branded
generics pharmaceutical presence and further expanding Abbott's presence in
fast-growing markets. Under the terms of the agreement, Abbott will acquire
the holding company that indirectly owns approximately 73 percent of CFR
Pharmaceuticals and will conduct a public cash tender offer for all of the
outstanding shares of CFR. Assuming all publicly-held shares are tendered, the
total purchase price would be approximately $2.9 billion, plus the assumption
of net debt of approximately $430 million.
This acquisition immediately establishes Abbott among the top 10
pharmaceutical companies in Latin America, further broadening Abbott's
geographic presence across the region.
"With its scale and leadership positions in the region, strong commercial and
development organizations, well-respected leadership team and a trusted
portfolio of recognized brands, CFR is one of the leading branded generic
companies in Latin America," said Miles D. White, chairman and chief executive
officer, Abbott. "This acquisition will significantly enhance and broaden
Abbott's Latin American footprint, and is well aligned with our long-term
strategy and commitment to fast-growing markets."
Abbott expects the acquisition to add approximately $900 million to its sales
in the first full year (2015), with expected double-digit sales growth over
the next several years.
CFR Pharmaceuticals, headquartered in Santiago, Chile, participates in 15
Latin American markets and has a comprehensive product portfolio that is well
aligned with Abbott's current pharmaceutical therapeutic areas of focus in
women's health, central nervous system, cardiovascular and respiratory
diseases. The addition of CFR's business will significantly improve Abbott's
position in several markets, and provide the opportunity to expand each
company's portfolio across Latin America.
"We are pleased to join with Abbott to enhance CFR's leadership across Latin
America," said Alejandro Weinstein, chief executive officer, CFR
Pharmaceuticals. "CFR and its employees will become part of an organization
much like itself, a well-respected company with a long heritage and commitment
to delivering quality health care products that improve people's lives."
CFR currently markets more than 1,000 products and has a proven track record
of rapidly developing and bringing new products to market. In addition to
leading products and a robust pipeline, the acquisition adds approximately
7,000 employees, and R&D and manufacturing facilities in Chile, Colombia, Peru
and Argentina.
The Latin American Pharmaceutical Market
The Latin American pharmaceutical market is expected to reach $73 billion in
sales this year, and is expected to reach $124 billion by 2018, with estimated
annual growth rates of two to three times that of developed markets over the
coming years, according to IMS forecasts.
Financial Highlights
Under terms of the agreement, Abbott will commence a tender offer to purchase
all the outstanding shares of CFR Pharmaceuticals following necessary
regulatory approvals. Abbott plans to fund the transaction with cash on the
balance sheet.
Assuming the transaction closes as anticipated by the end of the third quarter
of 2014, Abbott would expect to benefit from the year-over-year sales increase
in the fourth quarter. The addition of CFR does not impact Abbott's full-year
2014 ongoing EPS guidance previously provided.
Abbott anticipates this transaction to be accretive to ongoing earnings per
share in 2015 and increasing thereafter, before one-time transaction-related
items, which will be provided at a later date. The transaction is subject to
customary closing conditions and regulatory approvals.
Barclays advised Abbott on the transaction; Deutsche Bank Securities Inc.
advised CFR.
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