While all eyes were on other potential mergers, Hungary's Richter Gedeon made two deals that will boost it to the top of Central and Eastern Europe's pharma industry.
In a $1.32 billion buyout, Richter will acquire Poland's Polpharma, which went private in 2000 and has been growing ever since. At the same time, Richter will fork over $126.4 million for an 80 percent stake in Russia's OAO Akrihin. The deals will be done via stock swap with Genefar, which owns Polpharma and a stake in OAO Akrihin (the latter as part of an investor group). Thus Richter will grow to a market cap of $5.3 billion, and Genefar will end up with a stake of 26.75 percent.
The deals appear to be Richter's way of growing out of a slump. Because of budget-cutting in Hungary, Richter has seen domestic sales drop; in the third quarter, those revenues fell 24 percent. Post-buyouts, the company expects a quarter of its sales to come from Poland and another 20 percent from Russia, with only 20 percent sourced at home.
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