Actavis plans agreement to sell some businesses in Europe to Aurobindo

Actavis announced that it intends to enter into an agreement to divest its generics commercial operations in France, Italy, Spain, Portugal, Belgium, Germany and the Netherlands to Aurobindo. Sigurdur Oli Olafsson, president of Actavis, said the transaction will allow the company "to focus management time and resources to support accelerated investment in driving faster growth of other markets, including Central and Eastern Europe and Southeast Asia."

Under the deal, which Aurobindo expects will cost about 30 million euros ($41 million), the Indian drugmaker would acquire Actavis' pharmaceutical commercial infrastructure in the seven markets, including products, marketing authorisations and dossier license rights. The companies would also enter into a long-term strategic supply arrangement.

The acquisition will expand Aurobindo's front-end operations with about 1200 products and 200 more in the works. The company estimates the businesses acquired would record net sales of 320 million euros ($433 million) for 2013, growing at 10 percent year-on-year, and it expects the operations to turn profitable in combination with its vertically integrated platform. Aurobindo also said the deal would provide a "ready-made hospital sales infrastructure" for it to introduce its own injectable and specialty portfolio across Western Europe.

The company's senior vice-president of European operations, V. Muralidharan, remarked that the "transaction will complement [Aurobindo's] strategy of pursuing organic growth along with value-creating acquisitions within our served markets and adding complementary growth platforms to provide scale and revenue diversity."

Last week, a Bloomberg report cited Actavis CEO Paul Bisaro as saying the company would discontinue operating in China due to the country's "risky" business environment. Bisaro said Actavis had already sold one operation there and is negotiating to divest another.

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