Three weeks after Sanofi ($SNY) CEO Chris Viehbacher mentioned he liked less obvious countries for emerging market opportunities--places such as Colombia--he pulled the trigger on a deal there. This begs the question of whether the French drugmaker is currently working on deals in Indonesia and Vietnam, since he mentioned them in the same interview.
Sanofi announced Tuesday that it is buying Genfar, which it termed the second-largest generics maker in Colombia. Terms of the deal were not given up, but Sanofi said Genfar's total sales last year were $133 million, with about 30% of that from outside Colombia. It does business in Venezuela, Peru, Ecuador and 10 other countries. The company said in a statement that Genfar's "large portfolio of affordable pharmaceuticals" puts the French drugmaker in a good position in the Andean countries and Central America, with about 200 million people. It also gets some products that it can add to its portfolio of animal health offerings in the buyout, which is slated to close in Q1 of next year.
Sanofi became a significant force in Latin America with the $660 million purchase in April 2009 of Medley, the large Brazilian generics maker, which came right on the heels of its buyout of Mexico's Laboratorios Kendrick. Those deals were believed to have made it the largest generics maker in Latin America. Like its peers, Sanofi is looking to emerging markets to offset falling revenues as blockbusters, like its blood thinner Plavix, get undermined by the same kind of generic drugmakers it is buying.
The Genfar news is unlikely to get a terrific response among the workforce in its home country, where Sanofi is in the process of downsizing by up to 1,500 more employees. It said last week that it would eliminate 900 jobs through attrition, voluntary exits, early retirements and transfers over the next few years. Another 600 positions remain at risk since the company said it had yet to decide the future of its Toulouse R&D facility. Sanofi is under very public pressure from government officials to keep some portion of those jobs. More details of the cuts are expected to emerge this week after it meets with employee representatives.
In an interview with Bloomberg last month, Viehbacher said he sees buyouts and partnerships in places such as Colombia and Vietnam as bargains as more mature growth markets like China become less plentiful.
- here's the release