Two of the world’s largest generics makers are looking to lay their hands on the largest generics manufacturing plant in Latin America, sources tell Reuters, as Pfizer looks to exit a business that has not lived up to expectations.
Teva ($TEVA) and Mylan ($MYL), as well as India’s Sun Pharmaceutical and some investment banks, are reportedly interested in buying Pfizer’s 40% stake in Laboratório Teuto|Pfizer, the Brazilian business Pfizer spent $240 million on in 2010 as part of an emerging markets drive, sources tell Reuters.
The U.S. drug giant reportedly decided two months ago to divest its position in the business. Pfizer and the Melos family that holds the 60% share have brought in the investment banking units of Goldman Sachs Group and Grupo BTG Pactual to handle a sale, sources said. None of the parties would comment on the exclusive report.
When Pfizer bought into Teuto 6 years ago, the Brazilian economy was thriving. Sources said Pfizer had an option to claim the rest of the business at 14.4 times operational profit between 2014 and 2016. But with Brazil in its worst recession in 80 years, growth in generic drug sales has slowed and the partners are not in agreement on strategy, Reuters reports.
It could be another M&A opportunity for Teva, which indicated several years ago that Brazil was on its list of emerging markets where it might want to do a deal. At the time, the company's global generics CEO, Sigurdur Olafsson, said its place at No. 81 in Brazil was too far behind for the largest generics maker in the world.
Brazil is also a market where Mylan has been working to grow. It picked up an antibiotics manufacturing facility there as part of its $1.75 billion buyout of Indian sterile injectables specialist Agila Specialities in 2013.
- read the Reuters story