Abbott Acquires Latin American CFR Pharmaceuticals

Abbott announced in a press release that it has agreed to acquire CFR Pharmaceuticals, a Latin American pharmaceutical company. The acquisition positions Abbott in the growing Latin America market and doubles its generic drug presence in that region, which is estimated to bring in $900 million in sales in 2015, with double-digit sales growth expected in the coming years. Abbott expects to tender about $3 billion for CFR, which it says is worth it to instantly become one of the top ten pharmaceutical companies in Latin America.

Miles D. White, chairman and CEO at Abbott, said, "With its scale and leadership positions in the region, strong commercial and development organizations, well-respected leadership team and a trusted portfolio of recognized brands, CFR is one of the leading branded generic companies in Latin America. This acquisition will significantly enhance and broaden Abbott's Latin American footprint, and is well aligned with our long-term strategy and commitment to fast-growing markets."

CFR Acquisition

Santiago, Chile-based CFR Pharmaceuticals is present in 15 Latin American markets. Its portfolio of cardiovascular, respiratory, central nervous system, and women’s health drugs complement Abbott’s therapeutic areas. CFR markets over 1,000 products and has a robust pipeline. Abbott will gain CFR’s laboratory and manufacturing facilities in Chile, Colombia, Peru, and Argentina and be responsible for CFR’s 7,000 employees. Abbott will purchase the CFR holding company, which owns over 70 percent of CFR. Abbott will also offer cash for outstanding shares of CFR and assume CFR’s debt of approximately $430 million. The transaction is expected to close by the end of the third quarter of 2014.

Latin American Pharmaceutical Market

Abbott states that the market in Latin America is worth $73 billion in sales this year, with growth expected to hit $124 billion by 2018. That annual growth rate is two or three times the growth rate in developed markets. CFR sells 30 percent of its products in Colombia, 21 percent in Chile, and 16 percent in Peru. A report by the Economist in 2013 found that pharmaceutical spending in Latin America should grow at an average annual rate of 6.6 percent in 2013-17 due to improved access to public healthcare and the expansion of private healthcare. Brazil and Mexico should see the most pharmaceutical sales of $40 million and $18 million in 2014, respectively.