FAS green-lights AFK Sistema bid to buy 100% of VeroPharm, but with terms
MOSCOW. Nov 12 (Interfax) - Russia's Federal Antimonopoly Service (FAS) has approved AFK Sistema's request for permission to buy 100% of the stock in pharmaceuticals company OJSC VeroPharm , but has attached some terms, a FAS statement says.
VeroPharm's shares shot up 7.5% on the news. Pharmacy Chain 36.6 , which owns 51.8% of VeroPharm, was up 3.4% on the MICEX-RTS by 6:23 p.m. Both companies have rallied more than 10% since the start of November, when new broke that Sistema intended to buy VeroPharm.
The FAS established that VeroPharm has a dominating position on the market for medicines with MNN Gemifloksatsin, and its subsidiary LLC LENS-Pharm with MNN Poliadenilovaya Kislota + Poliuridilovaya Kislota.
The FAS takes the view that the conduct of this deal could lead to a limiting of access to the market for the sale of these medical preparations by independent counteragent VeroPharm and LENS-Pharm. In light of this, the FAS requires of Sistema and VeroPharm to ensure the fulfillment of all contracts for the delivery of all medicines existing on the date the deal is completed.
Before the deal is done, Sistema is to post on its official website the document regulating its commercial policy as regards VeroPharm medical preparations, and announce changes to commercial policy in letter form to the FAS within thirty days.
The parties are not to, from the date the deal is completed, effect any unfounded economic or technological reduction or halt of the production and supply of goods that are still in demand. They are also to announce to the FAS either of such circumstances in letter form within thirty days.
AFK Sistema and VeroPharm are to annually inform the FAS in letter form that they are meeting these conditions.
The parties to the deal are to announce its completion to the anti-monopoly agency within twenty days from the day the deal is wrapped up.
A representative of Pharmacy Chain 36.6 , which owns 51.8% of VeroPharm, told Interfax that if the company's sale goes through, the company will repay the Sberbank of Russia credit it got last year ahead of term. "It the credit will have to be paid off early. The stock stake at issue is in security with Sberbank," the source said, without specifying the parameters of the deal or a timeframe for its completion.
According to DSM Group data, VeroPharm is third in a rating of the largest Russian pharmaceutical companies. Company product is provided by three plants: in Belgorod, Voronezh, and Pokrov. VeroPharm specializes in the production of Rx medical goods, which account for about 70% of its sales revenues.