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Johannesburg - Pharmaceutical company Aspen Pharmacare (APN) has agreed on the terms for a series of strategic interdependent transactions with leading multinational pharmaceutical group,
GlaxoSmithKline (GSK).
The five deals are valued at R3.5bn.
By 11:00, Aspen shares had fallen 4.6% to 4 839c apiece.
Aspen will buy the rights to distribute GSK products in South Africa by Aspen's wholly owned subsidiary, Pharmacare.
Aspen and GSK will also collaborate to market and sell of prescription pharmaceutical products in sub-Saharan Africa, excluding South Africa, Lesotho and Swaziland, between Aspen and GSK. The collaboration will be known as GSK Aspen Healthcare for Africa.
Aspen - through a new and wholly owned subsidiary - will buy GSK's manufacturing facility in Bad Oldesloe, Germany as a going concern.
Aspen will also, through its subsidiary Aspen Global, Aspen's wholly-owned subsidiary, Aspen Global, of eight specialist
products for worldwide distribution.
Aspen will issue 68.5 million ordinary shares to GSK - or approximately 16% of Aspen's issued ordinary share capital.
On completion of the transaction GSK will attain the right to nominate one member to the Aspen Board.
Based on Aspen's closing share price on 11 May 2009, the transactions have a value of R3.5bn, or approximately US$411.5m.
The final value of the transactions and the attribution of this value to the individual transactions will depend on the closing price of Aspen shares on the JSE on completion of the transactions.
In terms of the deal, Aspen will acquire the rights to sell, market and distribute GSK's products in South Africa for a minimum period of 20 years.
The group said as the leading generics pharmaceutical company in South Africa, Aspen is currently well represented in both the private and public sectors in South Africa. Consequently, Aspen has the capability to continue with the effective
promotion and distribution of the established GSK brands within South Africa and to leverage its wide distribution reach.
GSK will maintain a presence in South Africa through its retained Consumer Healthcare business and the GSK scientific office.
At 09:40 on the JSE, Aspen's share price was down 6%, at 4 765c.
- Fin24.com