By Nqobile Dludla
JOHANNESBURG (Reuters) -Aspen Pharmacare is expanding further into China through a deal to buy the Chinese business of Swiss group Sandoz (SIX:SDZ) for up to 92.6 million euros ($100.6 million), the South African company said on Monday.
As part of the deal, Aspen Global Incorporated, a subsidiary of Aspen, will also buy the selling and intellectual property rights of a portfolio of established products that include Sandostatin, Aclasta and Voriconazole.
The rights will also cover a pipeline of products to be launched by Sandoz China in the short to medium term.
The deal "represents an attractive opportunity for Aspen to take a major step in its stated objective of increasing its presence in China," the company said.
Aspen said it will pay up to 92.6 million euros, with 18.5 million euros contingent upon the sales performance of the products in the pipeline. The pharma giant will fund the net upfront cash from existing debt facilities.
Additionally, Aspen will dispose of the commercialisation rights and related intellectual property for four anaesthetic products currently sold by Aspen in the European Economic Area to Sandoz.
For the disposal, it will receive up to 55.5 million euros, with 9.3 million euros contingent on the sales performance of its anaesthetic products, namely Nimbex, Tracrium, Carbocaine and Naropin.
"The disposal will allow Aspen's European management to adopt a more focussed approach to its remaining anaesthetic products in the region," Aspen said.
It added that those drugs it is selling "will be complementary to Sandoz's existing pharmaceutical offering in Europe, where it has significant scale and is well positioned to leverage their potential".
Aspen is targeting to add about 1.8 billion rand ($96.23 million) of annual sales to the group from the Chinese business, while the sales of the anaesthetic products during Aspen's financial year ended June 30 were about 280 million rand.
The deals are expected to be completed in the second quarter of next year.
($1 = 0.9205 euros)
($1 = 18.7048 rand)