Beximco Pharmaceuticals is set to acquire 54.6 per cent stake in Sanofi Bangladesh for about Tk 400 crore, as it looks to expand its product base and diversify into new areas.
With this, the French pharmaceuticals giant will exit Bangladesh ending its presence in the country that spans more than six decades.
In a posting on the London Stock Exchange, the local pharmaceuticals maker said it entered into a binding commitment with Sanofi Group to acquire a majority stake in Sanofi Bangladesh.
The proposed transaction is subject to the approval of the Bangladesh Bank and completion of share purchase agreement.
The proposed transaction will be completed within the next three to nine months, said Beximco, one of the biggest drug-makers in Bangladesh, in a separate statement.
"We are delighted to announce the proposed acquisition of a majority stake in Sanofi Bangladesh," said Beximco Pharma Managing Director Nazmul Hassan.
If approved, it will be the second strategic acquisition in the company's history. It acquired Nuvista Pharma Ltd (formerly Organon Bangladesh) in 2018.
"The acquisition of Sanofi Bangladesh will serve as a strong foundation for sustainable growth in the future through the strengthening of our position in therapy areas where Sanofi has a strong footing," said Hassan.
"We believe the unique and diverse portfolio of Sanofi will complement our existing product range and drive significant revenue growth for the company."
The transaction value would be $48.5 million in minimum and $55 million in maximum depending on cash reserves on the day of closing, said Salman F Rahman, vice-chairman of Beximco Group, in a WhatsApp message.
Shares of Beximco Pharma rose 1.48 per cent to Tk 198.20 on the Dhaka Stock Exchange yesterday.
The news came as Sanofi, which owns 54.6 per cent shares of Sanofi Bangladesh, has been trying to leave Bangladesh after failing to compete with
domestic companies. Its manufacturing capacity has not expanded for many years. Sanofi's share in the country's pharma market is less than 2 per cent.
The industries ministry holds 25.36 per cent stake in Sanofi Bangladesh, and Bangladesh Chemical Industries Corporations owns 19.96 per cent shares.
Sanofi has been operating in Bangladesh since 1958. It merged with various entities to form Sanofi-Aventis in 2004. In 2013, it was renamed Sanofi Bangladesh Ltd.
The company announced its intent to sell its stake in Sanofi Bangladesh in October 2019.
With more than 800 employees and approximately 100 branded generic products, Sanofi Bangladesh has a strong presence in cardiology, diabetes, oncology and dermatology segments.
Sanofi supplies its global brands of vaccines, insulins and chemotherapy drugs to Bangladesh through direct imports, which the group will continue to distribute following the completion of the proposed transaction, said Beximco in its posting on the London Stock Exchange.
In the year that ended in December 2019, Sanofi Bangladesh generated Tk 387.95 crore in revenue. Its profit before tax was nearly Tk 50 crore. Sanofi had gross assets of nearly Tk 610 crore.
In a statement, Sanofi Bangladesh said, "The decision to sell its share in Bangladesh is as a result of Sanofi's global business strategy."
The statement said Beximco Pharma was selected as Sanofi Bangladesh's preferred bidder and had had the opportunity to complete its due diligence enquiries as part of the sale process.
"Across the world, Sanofi regularly assesses the best ways in which to serve our customers. Accordingly, we have carefully selected Beximco Pharma that will continue to build on Sanofi's legacy through investments and to grow the business to provide more patients with increased access to Sanofi's products across Bangladesh," said Muin Uddin Mazumder, managing director of Sanofi Bangladesh.
In its postings on the LSE, Beximco said Sanofi Bangladesh 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.
"The proposed transaction would enhance and accelerate Beximco Pharma's strategy to consolidate its position as a leading pharmaceutical company in Bangladesh by expanding its core capabilities and product offering for the local market."
Sanofi's manufacturing facilities, which are spread over an area of 25 acres, are located near Beximco Pharma's manufacturing facility in Tongi.