Actavis Plc agreed to sell its generic drug operations in seven western European countries to India’s Aurobindo Pharma Ltd. as it focuses on other regions including Southeast Asia.
Aurobindo will buy Actavis’s generic products, marketing authorizations and dossier license rights in France, Italy, Spain, Portugal, Belgium, Germany and the Netherlands, the Dublin-based drugmaker said in a statement. The purchase, expected to cost about 30 million euros ($41 million), will be funded with Aurobindo’s own cash, the Indian company said in a separate statement.
“This transaction will permit Actavis to focus management time and resources to support accelerated investment in driving faster growth of other markets, including Central and Eastern Europe and Southeast Asia,” Sigurdur Oli Olafsson, President of Actavis Pharma, said in the statement.
Actavis said earlier this week it will end its presence in China due to a difficult business climate. While the country has more than 1.3 billion potential customers, the government has made it a difficult place to conduct business, Chief Executive Officer Paul Bisaro said in an interview. The company has sold one operation there and is in talks to sell another.
Actavis shares gained 1.4 percent to $183.28 in New York yesterday. The stock has more than doubled in the past year. Aurobindo dropped 3.1 percent to 384.90 rupees in Mumbai yesterday compared with a 1 percent decline in the benchmark S&P BSE Sensex index.
The acquisition will provide a “readymade hospital sales infrastructure” for Aurobindo to introduce its own injectable and specialty portfolio across Western Europe, the Hyderabad, southern India-based company said.
In August, Aurobindo agreed to buy a 57 percent stake in Silicon Life Sciences Pvt. from a consortium led by Trident Chemphar Ltd. for an undisclosed sum. Aurobindo and its units had 3.1 billion rupees ($50 million) of cash and equivalents and 35.1 billion rupees of total debt as of Sept. 30, according to data compiled by Bloomberg.
The two drugmakers will also enter into a long-term supply arrangement, Actavis said.