In a deal worth R4.2 billion, India's Natco Pharma will purchase sizable shares in South Africa's pharmaceutical behemoth Adcock Ingram. This would allow the 135-year-old company to become a privately held company that is jointly controlled by Natco and Bidvest, which will continue to be the largest shareholder.
According to PTI, the decision came after a meeting of Adcock Ingram shareholders approved Natco's plan to buy all of the company's common shares. According to a statement released on Friday by the Johannesburg Securities Exchange (JSE), Natco had made a definite offer in July of this year.
Adcock Ingram's share price increased by 20% as a result of Natco's July offer. The announcement states that Natco Pharma South Africa will purchase all of Adcock Ingram's common shares, excluding those that it now owns, Bidvest's shares and Adcock Ingram's treasury shares.
Adcock Ingram will be delisted from the JSE after more than 98% of its shareholders voted in favor of the Natco deal.
Adcock Ingram began as a tiny pharmacy in 1890 and has since expanded to become one of the top pharmaceutical companies in South Africa, providing a variety of prescription, over-the-counter (OTC), consumer and hospital products. Several of its brands are now well-known throughout the country.
“As a proudly South African company, our focus lies not only in healthcare but also in the value we add to society through environmental protection, community upliftment and philanthropy,” the company stated on its website.
Adcock Ingram informed that, in light of Natco's stake acquisition, it had decided against making any immediate changes to its product line. According to the corporation, no brands would be withdrawn unless it was economically required, and operations would carry on as usual.
“In the consumer segment, we have made significant progress in the personal care market, which is not price-regulated. However, our strategy, from a regulatory and risk perspective, has been to concentrate on the Southern African market, as we would lack economies of scale in territories further afield,” stated Adcock Ingram CFO Dorette Neethling.
Neethling added that the company would gain from the proposed deal since it would be able to function privately under two sizable shareholders, giving it freedom and efficiency.
According to Natco, the acquisition will provide it with a solid market position in Southern Africa.
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