Aspen Pharmacare Holdings Ltd., the largest maker of generic medicines in the southern Hemisphere, agreed to buy licenses to sell Nestle SA’s infant formula in Australia and southern African countries for $215 million.
Aspen will get the right to intellectual property licenses and assets that have been owned by a Pfizer Inc. unit that Nestle is acquiring, Aspen said in a statement today. Australian competition authorities have approved the acquisition, while South African and Namibian approval is pending, Aspen said.
The drugmaker, which supplies medicines in more than 150 countries, is acquiring product lines to expand in Australia, Latin America and sub-Saharan Africa. The Asia-Pacific business is expected to replace South Africa as the group’s largest revenue generator by the end of the 2013 financial year, Aspen said March 7.
“This is a good fit,” said Wayne McCurrie, a portfolio manager at Momentum Asset Management in Johannesburg. “Aspen’s business model has been to buy the rights to use established trade names and to distribute these in fast growing-regions and emerging markets. The pharmaceutical space is hugely competitive, so Aspen has to keep delivering such deals.”
Nestle is selling assets after its $11.9 billion purchase of Pfizer’s infant nutrition business to comply with antitrust regulators.
Aspen previously had an agreement with Pfizer to sell infant formula. That partnership, which had contributed sales of about 250 million rand ($27 million) a year, ended in April 2011. To replace the loss of the business, Aspen introduced its own brand of infant milk, Infacare Gold.
The stock, which has rallied 63 percent in the past year, was little changed at the close in Johannesburg, adding less than 0.1 percent to 191 rand.