Abbott has signed a definitive agreement to acquire Veropharm, a leading Russian pharmaceutical manufacturer. Under the terms of the agreement, Abbott will acquire Limited Liability Company Garden Hills, the holding company that currently owns a controlling interest in Veropharm, for between 13.6 billion rubles and 17 billion rubles ($395 million to $495 million ) depending on Garden Hills’ share ownership of Veropharm at the time of close. Garden Hills currently owns more than 80% of Veropharm but is expected to own more than 95% by the time the transaction closes. Pursuant to the agreement, Abbott will also assume net debt of 4.7 billion rubles ($136 million). The transaction is expected to close in the fourth quarter of 2014.

Upon completion of the transaction, Abbott will also establish a manufacturing presence in Russia through its ownership of Veropharm’s existing production facilities as well as a new manufacturing facility that is currently under construction by Veropharm. Veropharm has pharmaceutical manufacturing facilities in Pokrov, Belgorod, and Voronezh. Abbott intends to use its manufacturing expertise to expand Veropharm’s capabilities and enhance the existing infrastructure.

Through this acquisition Abbott will obtain a portfolio of medicines that is aligned with its current pharmaceutical therapeutic areas of focus in women’s health, central nervous system, cardiovascular, and gastroenterology, while also adding an offering in the field of oncology. Veropharm’s product portfolio has more than 100 products. The company employs 2,000 people.

See related article, “Gauging the Potential of Russia’s Pharmaceutical Market”

Source: Abbott