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CFR needs more black shareholders - govt

Johannesburg - South Africa would require Chile's CFR Pharmaceuticals to increase its black shareholders if it allowed it to buy local firm Adcock Ingram, a government official told Business Day newspaper on Thursday.

Santiago-based CFR has bid $1.2bn for the local drugmaker, an offer that has been rejected by Adcock's top shareholder, the government-run Public Investment Corporation.

But the director general of the Department of Trade and Industry told the newspaper his priority was to ensure increased investment in South Africa and higher black ownership, a sign the deal may have some government support.

"From the department's perspective, we say there must be substantial investment that will expand local production and there must be significant black economic empowerment shareholding," the paper quoted Lionel October as saying.

He said he would expect the local unit to increase its black owners to 25.1%.

"We are not arbitrary. We don't have a problem whether it's Chilean or anyone else," he told Business Day. October could not be reached for comment on Thursday.

The paper also said the deal was understood to have the backing of Economic Development Minister Ebrahim Patel, who has thrown up concerns about previous inbound takeover bids.

South Africa has scuppered big cross-border deals in the past, especially when they are seen as not offering enough benefit for the country's black majority.
 

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