Hikma Pharmaceuticals has acquired an Egyptian drugmaker, in a deal that is set to improve its market share in Egypt's rapidly growing private health sector.
The Jordanian drug manufacturer said it would pay 142.4 million Egyptian pounds (Dh81.1m) to take full control of Egyptian Company for Pharmaceuticals & Chemical Industries.
The move would bolster Hikma’s presence in Egypt, where it currently has a market share of about 1.6 per cent, said the company. The deal also marks the latest attempt by a company to try to take advantage of the depressed value of the Egyptian pound to acquire assets in the Arab world’s most populous nation.
“Since we entered the Egyptian market in 2007, we have been rapidly growing our presence,” said Said Darwazah, the Hikma chief executive.
“This acquisition will further accelerate that growth, expanding our product portfolio and adding additional manufacturing capacity and technologies.
“We continue to strengthen our position as the leading regional manufacturer in Mena and to pursue other value-creating acquisition opportunities in the region.”
The acquisition adds 35 new products in 46 dosage forms and strengthens the company’s existing portfolio, including three cephalosporin antibiotic brands for the Egyptian market and access to the ophthalmology market.
Egypt’s private pharmaceutical market is valued at about US$2.3 billion (Dh8.45bn) and grew by 10.6 per cent during the 12 months to June last year, said Hikma, citing estimates from IMS Health.
The deal is expected to close by the middle of next month. HC Securities and Investment, the Cairo-based investment bank, acted as adviser to Hikma on the deal.
Hikma’s London-listed shares rose 0.9 per cent to 778 pence each in midday trading following the news, while its Nasdaq Dubai-listed global depository receipts were unchanged at $12.34 each.
The deal follows a solid year for mergers and acquisitions in the Middle East, with the $13.4bn of deals announced during last year representing a 12.5 per cent increase on the previous year’s total, according to date from Thomson Reuters.
Middle Eastern companies have leapt to acquire companies in Egypt trading at cheap valuations stemming from the weakness in the Egyptian pound, currently depressed because of the country’s political and economic crisis.
Last month, Qatar National Bank announced its attention to acquire the Egyptian arm of France's Société Générale, NSGB, valuing the bank at $2.5bn.
A week later, Dubai's Emirates NBD announced the purchase of the Egyptian retail banking assets of BNP Paribas, France's largest lender, for $500m.
