Abbott, unfazed by political tensions, closes deal for Russia’s Veropharm
Mounting political tensions between Russia and the West may have recently scared Germany’s Fresenius out of a partnership in the country. But they won’t spook Abbott Laboratories ($ABT) out of its VeroPharm buy, it announced Friday.
|Russian billionaire Roman Avdeev–Courtesy of Roman Avdeev|
The Illinois-based company has completed its pickup of the Russian generics maker, shelling out 16.7 billion rubles ($305 million) to purchase holding company Garden Hills–which owns about 98% of Veropharm–from local billionaire Roman Avdeev.
Through the deal, Abbott will bolster a Russian presence it’s been cultivating for 40 years, it said in a statement. And with Veropharm will come a portfolio that complements its focus areas in women’s health, CNS, cardiovascular and gastroenterology, as well as a new oncology offering. Considering Russia’s growing middle class, the company expects its new addition to kick in $150 million to 2015, it said in June.
Other drugmakers haven’t been as quick to jump at Russia’s market potential, and Fresenius wasn’t the first to ditch its Russian ambitions when it last month bailed out of a Russian joint venture with Sistema JSFC and Zenitco Finance Management. In May, domestic company Pharmstandard agreed to acquire Russian biosimilars company Biocad after the country’s political climate reportedly scared off once-interested suitors Pfizer ($PFE) and Amgen ($AMGN).
But Abbott, an emerging-markets veteran, has experience navigating the challenges that come along with international expansion. It’s 2010 buyout of India’s Piramal Healthcare put it on the map as a developing world force, vaulting it to No. 1 in that country’s drug market with a 7% share. And more recently, it nabbed Chile’s CFR Pharmaceuticals to beef up its Latin American generics business.
– read Abbott’s release