Adcock forges ahead with its African expansion while CFR deal stalls

Adcock Ingram has repeatedly delayed a vote on a July takeover offer from Chile's CFR Pharmaceuticals amid shareholder disputes and regulatory delays. But though the buyout may be stalled, that hasn't stopped the South African drugmaker from moving forward with its own expansion plans. The company says it intends to double its sales from other countries on the African continent.

As Africa managing exec Kofi Amegashie told Bloomberg Thursday, those plans include increasing African sales outside its home market to 1 billion rand ($92.5 million) within four years. Adcock hopes to bank on an expanding middle class that can increasingly afford its meds. And if other African countries can chip in 25% to 30% of total revenue, Adcock--the second-largest pharma in South Africa--figures it can better compete with its larger rival, Aspen Pharmacare.

Among the drugmaker's targets is Nigeria, a market Amegashie called "very important." And though the price for doing business there can be as much as 30% higher than in South Africa due to a lack of reliable power or roads, Adcock is still looking to beef up its operations there through a combination of business startups and acquisitions, Amegashie told Bloomberg.

Adcock recently expressed concerns about competing with larger players, calling the market's global consolidation a threat to the company's long-term sustainability. So while the expansion will bolster Adcock's presence in Africa, its leaders still hope shareholders will agree to a $1.2 billion bid from CFR, a deal that would give Adcock access to overseas markets.

But the company's largest shareholder, state pension fund Public Investment Corporation (PIC), sees things differently. PIC has said it has concerns about putting the company in the hands of foreign owners; it also made clear last month that it's none too crazy about the idea of a cash-and-stock offer, instead preferring an all-cash transaction.

After shareholders voted in December to postpone the vote, on Thursday, Adcock delayed it once again to February, saying regulatory approval of shareholder documentation was taking longer than it had anticipated.

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