Aspen nabs Sigma's drug biz for $804M

Sigma Pharmaceuticals was playing its cards close to the vest last week when it denied a higher buyout offer from South Africa's Aspen Pharmacare. Aspen might not have hiked its offer for the entire company, but it had pitched a new, higher bid for Sigma's pharma division--and that offer has been accepted.

The South African company will pick up Sigma's drugs unit for A$900 million ($806 million) in a deal lauded as a win. "We think Aspen more likely than not got a good deal," David Low, a Deutsche Bank healthcare analyst, tells Bloomberg. "They've taken on some risk with generics, but a number of the other parts of the business have solid earnings and an attractive outlook."

Aspen intends to use its newly beefed-up Australian business as a jumping-off point for growth in the Asia Pacific region, according to a company statement. The deal will give Aspen about one-fourth of Australia's generics market, and is the country's largest drug manufacturer.

Any growth at Aspen also benefits GlaxoSmithKline, which bought a 16 percent stake in the company last year. As part of that deal, Aspen took on the job of distributing GSK's drugs in South Africa. It's unclear at this point whether Aspen will further extend the reach of GSK's products via the Sigma deal.

- read the Aspen release
- see the Bloomberg story
- get more from the Wall Street Journal
- check out the Sydney Morning Herald piece

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