Abbott to buy Latin American drugmaker CFR in $2.9 billion deal

Fri May 16, 2014 12:52pm EDT
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By Caroline Humer

(Reuters) - Abbott Laboratories (ABT.N: Quote) said on Friday it would acquire Chile's CFR Pharmaceuticals SA CFR.SN in a $2.9 billion deal that will more than double its branded generic drugs business in the fast-growing Latin American market.

This is the first deal for Abbott since it split into two businesses and spun off its blockbuster rheumatoid arthritis drug in a new company, AbbVie Inc (ABBV.N: Quote), last year and comes at a time when health mergers have surged.

Abbott plans to focus the branded generics business on about 14 or 15 fast-growing countries in emerging markets.

"Not all geographies are alike, and some are not particular focuses for us," Chief Executive Officer Miles White said during a conference call with investors. White said the company was still looking at other transactions.

While the Latin American pharmaceuticals market has been attractive to big drugmakers, there are few other big opportunities like CFR because most companies are small, family-owned businesses.

The pharmaceutical retail and distribution industry does have some larger companies, such as Mexico's Grupo Casa Saba SAB.MX and Brazil's Hypermarcas (HYPE3.SA: Quote). Earlier this month, Casa Saba sold its Chilean health retail arm, Farmacias Ahumada, to Britain's Alliance Boots for $638 million.

Abbott will buy about 73 percent of publicly traded CFR from a holding company controlled by the Weinstein family, which founded the company in the 1920s. It will conduct a tender offer for the remaining shares.

SALE SURPRISE   Continued...

Abbott Laboratories’ global headquarters in Abbott Park, Illinois is seen in an undated handout photo. REUTERS/Handout via Abbott Laboratories