Abbott, unfazed by political tensions, closes deal for Russia's Veropharm

Mounting political tensions between Russia and the West may have recently scared Germany's Fresenius out of a partnership in the country. But they won't spook Abbott Laboratories ($ABT) out of its VeroPharm buy, it announced Friday.

Russian billionaire Roman Avdeev--Courtesy of Roman Avdeev

The Illinois-based company has completed its pickup of the Russian generics maker, shelling out 16.7 billion rubles ($305 million) to purchase holding company Garden Hills--which owns about 98% of Veropharm--from local billionaire Roman Avdeev.

Through the deal, Abbott will bolster a Russian presence it's been cultivating for 40 years, it said in a statement. And with Veropharm will come a portfolio that complements its focus areas in women's health, CNS, cardiovascular and gastroenterology, as well as a new oncology offering. Considering Russia's growing middle class, the company expects its new addition to kick in $150 million to 2015, it said in June.

Other drugmakers haven't been as quick to jump at Russia's market potential, and Fresenius wasn't the first to ditch its Russian ambitions when it last month bailed out of a Russian joint venture with Sistema JSFC and Zenitco Finance Management. In May, domestic company Pharmstandard agreed to acquire Russian biosimilars company Biocad after the country's political climate reportedly scared off once-interested suitors Pfizer ($PFE) and Amgen ($AMGN).

But Abbott, an emerging-markets veteran, has experience navigating the challenges that come along with international expansion. Its 2010 buyout of India's Piramal Healthcare put it on the map as a developing world force, vaulting it to No. 1 in that country's drug market with a 7% share. And more recently, it nabbed Chile's CFR Pharmaceuticals to beef up its Latin American generics business.

- read Abbott's release

Special Reports: Top 10 generics makers by 2012 revenue - Abbott | Top 11 Fastest-Growing Generics Companies - VeroPharm

Suggested Articles

Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.

Private equity firm, in exclusive talks with Sanofi, says it'll invest to pump up Zentiva into an "independent European generics leader."

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.