Abbott to buy CFR for R30-billion

CFR‚ the Chilean pharmaceutical company that was frustrated in its takeover bid for Adcock Ingram earlier this year‚ is now to be taken over itself – at a price that suggests South African investors may have missed out.

US pharmaceuticals and healthcare products company Abbott Laboratories will acquire CFR in a $2.9billion (R30-billion) deal that will more than double Abbott’s branded generic drugs business in the fastgrowing Latin American market. The deal comes when mergers in the health industry have surged‚ with analysts looking to the expansion of generic drugs in emerging markets.

It comes after CFR’s $1.2-billion bid for Adcock was thwarted in February by its failure to gain the support of institutional investors in Adcock‚ particularly the Public Investment Corporation (PIC)‚ which accepted a rival‚ hostile offer for 34.5% of Adcock by Bidvest‚ letting Bidvest block the CFR deal.

“Abbott clearly sees value in CFR‚ which South African institutional investors in Adcock failed to see‚” said Aeon Investment Management analyst Asief Mohamed.

It is not clear whether Abbott would have made the offer even if CFR had succeeded in buying Adcock Ingram‚ but if it had‚ it would have meant Adcock shareholders missed two premiums.

Said another analyst: “This is just desserts for the PIC and Bidvest’s Brian Joffe‚ who will now almost certainly be precluded from entering any sort of business arrangement with CFR.” Bidvest chief executive Joffe had expressed interest in such an arrangement‚ which could have seen Adcock exporting its brands through CFR’s Latin American distribution network. — BDLive-Reuters