Abbott Laboratories may be close to a Russian buyout. According to government sources, the U.S.-based company wants to acquire its flu-vaccines partner, Petrovax. If the deal goes through, it would be among the three biggest foreign acquisitions in Russian pharma history, Izvestia reports.
Abbott ($ABT) is no stranger to emerging-markets buyouts, of course. It's now the biggest drugmaker in India, thanks to its 2010 deal for Piramal Healthcare's domestic drugs business. The same year, it bought Solvay Pharmaceuticals--and its $3 billion in emerging markets sales.
And that, in fact, is what led Abbott to Petrovax. A chunk of that $3 billion in sales came from Solvay's partnership with the Russian vaccines maker. A small chunk, admittedly; Izvestia quotes Petrovax's 2011 sales at $98 million. But that's enough to put the vaccine company in 12th place among domestic pharma companies, the paper says. Petrovax also is partnered up with Pfizer ($PFE) on pneumococcal vaccines for the Russian market.
According to Izvestia's sources, Abbott filed for approval to take over Petrovax by purchasing 68.5% of its shares. That includes a 25% stake now held by the European Bank for Reconstruction and Development. Co-founder and CEO Arkady Nekrasov would sell his 18.77% stake, while fellow founder Natalya Puchkova would sell 18.74%. The rest of the shares are company-owned. Analysts figure the deal would be worth up to $294 million.
Neither Abbott nor Petrovax would comment. But the deal would make sense for Abbott, given the Russian government's stance on foreign involvement in the drug market. Drugmakers need local production and partners to win over government buyers.
DSM analyst Yulia Nechaeva figures that Abbott is looking for a quick boost to its profile in Russia; right now, its annual sales in the $30 billion Russian market are $430 million, which doesn't even qualify for the domestic top 10.
- read the Izvestia story
Special Report: Abbott and Piramal - Top 5 Emerging Market Deals