Beximco Pharma seals deal to acquire majority stake in Sanofi Bangladesh

  • Chief Economics Correspondent,
    Published: 2021-01-21 20:47:34 BdST

Beximco Pharmaceuticals has struck an agreement to acquire a 54.6 percent majority stake in French pharmaceutical giant Sanofi’s Bangladesh unit at a base price of £35.5 million.

The country’s leading manufacturer and exporter of medicines announced the development in a media statement on Thursday evening.

Sanofi Group currently holds 54.6 percent shares in the paid-up capital of Sanofi Bangladesh.

Of the remaining shares, around 25.36 percent are held by the Ministry of Industries while Bangladesh Chemical Industries Corporations owns nearly 19.96 percent, it read.

The proposed acquisition is subject to the government’s clearance and completion of a definitive Sale and Purchase Agreement. It is anticipated that the acquisition would be completed within the next three to nine months, the statement added.

The base-price consideration of £35.5 million is subject to deduction for the net financial debt and adjustments for short/excess over an agreed normative working capital at the closing date.

Citing the last audited accounts prepared by Sanofi Bangladesh for the year 2019, the article said the Bangladesh arm of the French pharma giant generated revenue of Tk 3.879 billion (approximately £33.6 million), profit before tax of Tk 497.9 million (approximately £4.3 million) and had gross assets of Tk 6.093 billion (approximately £56.1m).

The final consideration, which may be up to a maximum of £40 million, will be paid in cash on completion of the proposed transaction, from a combination of the company's own cash resources and additional debt, an article in London Stock Exchange website stated.

“We are delighted to announce the proposed acquisition of a majority stake in Sanofi Bangladesh. If approved, it will be the second strategic acquisition in the Company’s history, following that of Nuvista Pharma Limited (formerly Organon Bangladesh) in 2018,” Beximco Pharma Managing Director Nazmul Hassan was quoted as saying.

“This acquisition of Sanofi Bangladesh will serve as a strong foundation for sustainable growth in the future through strengthening our position in therapy areas where Sanofi has a strong footing.

“We believe the unique and diverse portfolio of Sanofi will complement our existing product range and will drive significant revenue growth for the Company,” the statement quoted him further as saying.

The rest of the statement is as follows:

“Sanofi is a multinational pharmaceutical company that started its operation in Bangladesh as May and Baker in 1958 and later, merged with various entities to form Sanofi-Aventis in 2004.

“In 2013, it was renamed as Sanofi Bangladesh Ltd. The Company has a modern pharmaceutical plant located at Tongi to produce a range of products mostly to cater to the local market.

“Sanofi also supplies its global brands of vaccines, insulins and chemotherapy drugs to Bangladesh through direct imports. Sanofi has a strong presence in cardiology, diabetes, oncology, dermatology and CNS, and its portfolio includes global brands such as Lantus, Apidra, Fimoxyl, Flagyl, Avil, Enterogermina, etc.”

“The acquisition of stake in Sanofi Bangladesh Limited is a strong strategic fit for Beximco Pharma, with the potential to generate opportunities for long-term value creation for both companies, providing a strong foundation for sustainable growth, as well as enhancing the Company’s corporate reputation within the global territories it operates.

“This acquisition will add value and drive future growth of the business primarily through adding Sanofi’s balanced and growing portfolio such as modern insulins, oncology, dermatology and vaccines where Beximco Pharma has limited or no presence; accessing state-of-the-art manufacturing facilities including a PIC/S certifiable manufacturing facility for the Cephalosporin antibiotics, which are spread over an area of c. 25 acres of land, located near Beximco Pharma’s manufacturing facility in Tongi; ensuring synergies between the two companies, and opportunities of introducing Sanofi’s future global brands in Bangladesh.”

“The addition of Sanofi Bangladesh’s balanced and growing portfolio, including opportunities to introduce Sanofi’s future global brands to Beximco Pharma’s existing portfolio will drive future growth of the business by expanding its addressable market, as well as reinforcing the Company’s commitment to ensure access to breakthrough therapies and affordable medicines.”