Aspen to grow in China and Europe via two interdependent deals

Aspen did the transaction through its wholly owned subsidiary Aspen Global Incorporated. File image.

Aspen did the transaction through its wholly owned subsidiary Aspen Global Incorporated. File image.

Published Dec 5, 2023


Aspen Pharmacare Holdings has concluded agreements to acquire Sandoz (China) Pharmaceutical and its portfolio of products for up to €92.6 million (R1.89 billion), and to dispose of four anaesthetic products on sale in Europe.

“The acquisition is an attractive opportunity for Aspen to take a major step in our objective to increase our presence in China. Sandoz’s portfolio, pipeline, well-established infrastructure, and experienced team, will expand Aspen’s footprint and capabilities in the world’s second-largest pharmaceutical market, and strengthen our foundation for growth in China,” said Aspen CEO Stephen Saad.

Aspen said the payment of €18.5 million (R377.1m) of the acquisition price would be contingent upon the sales performance of the pipeline products to be rolled out at Sandoz (China).

Aspen did the transaction through its wholly owned subsidiary Aspen Global Incorporated (AGI), which is incorporated in Mauritius. The transaction includes a portfolio of established products commercialised by the company, and a pipeline of products to be launched in the short to medium term.

The disposal of the commercial rights and related intellectual property for four anaesthetic products, Nimbex, Tracrium, Carbocaine and Naropin, currently sold by Aspen in the European Economic Area, would be for up to €55.5m (R1.13bn), with €9.3m contingent on the sales performance of the products.

AGI intended to fund the upfront cash consideration from existing debt facilities.

The acquisition and interdependent disposal was subject to approval of the competition authority in China, and the deal was anticipated to be completed in the second quarter of 2024.

Aspen aims through the acquisition to add about R1.8bn to its annual sales, while sales of the anaesthetic products during Aspen's financial year to June 30 came to about R280m.

The acquisition was part of Aspen’s volume-based procurement mitigation strategy. It also represented an attractive opportunity for Aspen to increase its presence in China.

In addition, the company had an experienced sales team that would materially enhance Aspen's commercial capabilities.

Meanwhile, the disposal would allow Aspen's European management to adopt a more focused approach to its remaining anaesthetic products in the region, while the Anaesthetic Products would be complementary to Sandoz’s existing pharmaceutical offering in Europe, where it had significant scale and was well positioned to leverage their potential.

Sandoz is a global leader in generic pharmaceuticals and biosimilars. Following its recent spin-off from Novartis, it is listed on the SIX Swiss Exchange and has its head office in Basel, Switzerland.