Adcock Investor PIC Backs CFR Partnership After Takeover Block

The Public Investment Corp. said it backs a plan by Johannesburg-based Adcock Ingram Holdings Ltd. (AIP) to form a manufacturing partnership with CFR Pharmaceuticals SA (CFR) months after stopping a take over by the Chilean company.

CFR and Adcock, South Africa’s biggest maker of hospital products, are in talks over a manufacturing agreement and have discussed a tie-up on complementary products and areas of duplication, according to Adcock, which confirmed by e-mail comments made to a newspaper by Brian Joffe, the company’s chairman.

CFR, Chile’s biggest drugmaker, called off its 12.8 billion rand ($1.15 billion) offer to buy Adcock on Feb. 7, ending a 10-month fight for control of the company after Bidvest Group (BVT) Ltd. built up a 34.5 percent stake, enabling it to block CFR’s bid. The offer was also opposed by PIC, Adcock’s second-biggest shareholder with a 23 percent stake, which said Jan. 8 it would prefer a change of Adcock management.

“The agenda from the Chileans made perfect sense, expanding what Adcock was doing, penetrating new markets,” Elias Masilela, the chief executive officer of the Pretoria-based PIC, said in an April 1 interview in Johannesburg. “If we can get a partner like the Chileans who can help us access markets, why don’t we partner in Adcock?” he said, adding that a takeover would have limited South Africa’s benefit from any cooperation.

Adcock named Bidvest CEO Joffe as its chairman on Feb. 26, replacing Khotso Mokhele, who quit following demands from Bidvest and PIC. Last week Adcock appointed Kevin Wakeford as CEO. Wakeford headed Bidvest’s travel and aviation unit for three years prior to joining Adcock. Bidvest’s businesses also include food operations and a car sales enterprise.

Adcock last month said revenue at its southern Africa business fell 6 percent in the two months through February. Costs related to the CFR bid will be more than 100 million rand in the six months through March, it said. The stock has slumped 16 percent this year, while larger Aspen Pharmacare Holdings Ltd. has climbed 2 percent.

To contact the reporters on this story: Janice Kew in Johannesburg at; Franz Wild in Johannesburg at

To contact the editors responsible for this story: Antony Sguazzin at; Celeste Perri at Andres R. Martinez

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