The Low Post News

Abbott Acquiring CFR Pharma

Abbott Laboratories said on Friday it would acquire CFR Pharmaceuticals a generic pharmaceuticals company based in Chile, for an estimated $2.9 billion plus assumed debt of more than $430 million.

The deal means the company based in North Chicago will more than double its footprint in the pharmaceutical industry in Latin America. Abbott will now be amongst the top 10 companies in that market, which should reach over $73 billion in sales during 2014.

Abbott said the acquisition would inject over $900 million in new revenue during 2015 and sales growth in the double digits over a number of years.

CFR sells over 1,000 products in 15 markets in Latin America, employs nearly 7,000 and has research and development and manufacturing facilities in Argentina, Colombia, Chile and Peru.

Under the new agreement, Abbott is to acquire Kalo Pharma Internacional, the holding company, which indirectly owns nearly 73% of CFR. It will then conduct a cash tender offer to the public for what remains of the publicly held shares of the medical products company.

Abbott announced its new deal amidst a speculation in the market that it wanted to sell its generic drug portfolio that is underperforming, which includes many products sold exclusively in the international market.

Chicago based Abbott retained some of its medication business after it split its proprietary pharmaceutical segment last year into AbbVie Inc.

Last month more than $118 billion worth of acquisitions and mergers were made in the healthcare industry, which was a new record.

Abbott is the world’s largest makers of adult nutritional beverages and heart stents.

The deal’s equity value is 53% more than the value of CFR, which is $1.89 billion, based upon its closing prices for Thursday. The offer amounts to 35 cents per share, said the companies.

Abbott stock was up just under 1% in Friday morning to $39.30. Shares of the stock have increased 4.2% over the past 12 months through Thursday.

CFR based in Santiago is the biggest drug maker in Chile and has products for respiratory and heart diseases and women’s health.

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