Abbott Acquires Piramal's Healthcare Solutions Business
Strategic action will propel Abbott to No. 1 position with annual sales growth approaching 20 percent in India, expected to exceed $2.5 billion in sales by 2020
"This strategic action will advance Abbott into the leading market position in India, one of the world's most attractive and rapidly growing markets," said Miles D. White, chairman and chief executive officer, Abbott. "Our strong position in branded generics and growing presence in emerging markets is part of our ongoing diversified pharmaceutical strategy, complementing our market-leading proprietary pharmaceutical offerings and pipeline in developed markets."
"Emerging markets represent one of the greatest opportunities in health care - not only in pharmaceuticals - but across all of our business segments. Today, emerging markets represent more than 20 percent of Abbott's total business," said Mr. White.
"With this deal, the combined Healthcare Solutions and Abbott businesses will become the clear market leader in India, with a market share of approximately 7 percent," said Ajay Piramal, chairman, Piramal Group. "This was our collective vision and I am glad that those who are part of Piramal's Healthcare Solutions business will realize this dream."
Under terms of the agreement, Abbott will purchase the assets of Piramal's Healthcare Solutions business for a $2.12 billion up-front payment with payments of $400 million annually for the next four years, beginning in 2011. The transaction will not impact Abbott's ongoing earnings per share guidance in 2010. Abbott plans to fund the transaction with cash on the balance sheet.
This transaction is subject to shareholder approval of Piramal Healthcare Limited and other customary closing conditions, and is expected to close in the second half of 2010. This transaction is being conducted by a wholly-owned subsidiary of Abbott, resulting in full ownership of the assets of Piramal's Healthcare Solutions business (Domestic Formulations).
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