Chile's CFR accuses South Africa pension fund of protectionism

Tue Dec 17, 2013 6:51am EST
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By David Dolan and Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - Chile's CFR Pharmaceuticals CFR.SN has accused South Africa's state pension fund of protectionism for opposing its $1.2 billion bid for drugmaker Adcock Ingram, a sensitive charge in a country keen to attract capital but wary of foreign takeovers.

The state-run Public Investment Corporation (PIC), Adcock's (AIPJ.J: Quote) top shareholder, on Sunday rejected a sweetened cash and stock bid from Santiago-based CFR, saying it wanted all cash.

CFR Chief Executive Alejandro Weinstein shot back in a statement on Tuesday saying the PIC's real objection was to foreign ownership, citing comments by the fund's chief investment officer in July that it would prefer a local owner.

"Criticisms leveled at our offer by the PIC have little to do with commercial merits and are instead intended to allow a local buyer to succeed over a foreign buyer," Weinstein said.

"The current approach appears to be driven by protectionism."

No one at the PIC was immediately available for comment.

While South Africa's ruling African National Congress (ANC) has a history of blocking takeovers by overseas firms, or foisting onerous conditions on deals, the government itself has backed CFR's 12.8 billion rand ($1.2 billion) takeover.

That is a marked contrast to Pretoria's handling of Wal-Mart's (WMT.N: Quote) takeover of local retailer Massmart (MSMJ.J: Quote), which saw it take the world's largest retailer to an anti-trust court. That deal was approved in 2012, along with stringent conditions on how Wal-Mart would operate in South Africa.   Continued...

A man walks past the Adcock Ingram offices in Johannesburg December 3, 2013. REUTERS/Siphiwe Sibeko