The base price for the transaction agreed between Sanofi Group and Beximco Pharma is £35.5m but it may go up to £40m
Beximco Pharmaceuticals on Thursday announced its plan to acquire 54.6 per cent shares in Sanofi Bangladesh, capping months of suspense on who would take over the stakes of the French pharma giant, which has been angling for an exit from the country after 60 years since 2019.
The local drug maker, whose market capitalisation recently crossed the billion dollar-mark, was selected as the preferred bidder in a competitive process, it said in a statement on the website of London Stock Exchange, where it has been listed since 2005 on the Alternative Investment Market.
The base price for the transaction agreed between Sanofi Group and Beximco Pharma is £35.5 million and is subject to deduction for the net financial debt and adjustments for short/excess over an agreed normative working capital at the closing date.
The final consideration, which may be up to a maximum of £40 million, would be paid in cash on completion of the proposed transaction, from a combination of the Beximco Pharma’s own cash resources and additional debt.
The transaction will be completed within the next three to nine months.
If the deal is not approved by the Foreign Exchange Investment Department of the Bangladesh Bank or is not completed by October 20, Sanofi would be able to withdraw the offer.
The remaining 45.4 per cent shares in Sanofi Bangladesh is owned by the Bangladesh government through the Bangladesh Chemical Industries Corporation and the industries ministry.
“We have carefully selected Beximco Pharma, who will continue to build on Sanofi’s legacy through investments and growing the business to provide more patients with increased access to Sanofi’s products across Bangladesh,” said Muin Uddin Mazumder, managing director of Sanofi Bangladesh.
This will be the second strategic acquisition for Beximco Pharma after its 2018 purchase of Nuvista Pharma.
“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,” said Nazmul Hassan, MD of Beximco Pharma.
Beximco Pharma has limited or no presence in modern insulins, oncology, dermatology and vaccines, where Sanofi is a formidable player.
The deal will also give Beximco access to Sanofi’s state-of-the-art manufacturing facilities -- including a PIC/S certifiable manufacturing facility for the Cephalosporin antibiotics -- spread over 25 acres in Tongi.
Shares of Beximco Pharma have been on the rise since June after the Dhaka bourse resumed from the 66-day recess in line with the government’s countrywide general shutdown to slow the spread of coronavirus.
Since then, Beximco Pharma’s stock price soared more than two-and-a-half times. Yesterday, they closed at Tk 198.2, in contrast to Tk 70.3 on June 1, when trading resumed at the bourse.
In May, when the world was paralysed by fear of coronavirus, the homegrown drug maker grabbed headlines globally for being the first company to market remdesivir, the antiviral drug that showed promise in treating COVID-19 patients.
Three months later, it announced a tie-up with India’s Serum Institute to be the “exclusive distributor” of Oxford’s Covid-19 vaccine in Bangladesh. Beximco Pharma will supply 30 million doses of the Covishield vaccine to Bangladesh.
The two announcements meant Beximco Pharma stock has been much coveted amongst investors, big or small, said market insiders.
All the good press did translate into financial performance: the company posted profit growth of 24.7 per cent for the July-September quarter, which is highest amongst the listed drug makers.
Beximco Pharma’s profit in the first quarter of its 2020-21 financial year stood at Tk 108 crore. This comes after the local pharma giant reported a 16.6 per cent higher profit of Tk 354.4 crore for the financial year that ended on June 30.
Md Asad Ullah, executive director and company secretary of Beximco Pharma, credited the single-minded focus on quality control behind its current purple patch.
Besides, Beximco supplied the other medication for Covid-19 at both home and abroad.