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A subsidiary of Abbott Laboratories, the U.S. maker of Similac baby formula and other nutritional and drug products, is purchasing a controlling stake in Chilean drugmaker CFR Pharmaceuticals for $3.33 billion, including debt.
Magic Circle firm Clifford Chance is representing Abbott, which on Friday announced that it is buying the holding company that owns 73 percent of CFR for $2.9 billion, plus the assumption of $430 million in debt. Abbott says it intends to make a public cash tender offer for the remaining shares of CFR.
Cleary Gottlieb Steen & Hamilton is advising Santiago-based CFR, which sells more than 1,000 branded generic drugs in 15 countries in Latin America.
Abbott, which also makes medications for treatment of HIV and arthritis among many other products, says the deal will put it among the top 10 pharmaceutical companies in the Latin American market, which is growing much faster than European and U.S. markets. CFR projects the Latin American market to reach $124 billion by 2018 from $73 billion this year, citing data from IMS Health, a health care information provider.
“This acquisition will significantly enhance and broaden Abbott’s Latin American footprint and is well aligned with our long-term strategy and commitment to a fast-growing market,” said Abbott chairman and CEO Miles White in a statement announcing the deal.
Abbott says the acquisition, expected to close by the fourth quarter of this year, will potentially add $900 million to its sales in the first full year of 2015.
Clifford Chance corporate partner John Healy in New York and capital markets partner Anthony Oldfield in Sao Paulo are handling the deal for Abbott, with assistance from associates Carla Gorniak, Michelle Pham and Shakima Wells in New York, and Andrew Coffield in Sao Paulo.
Hubert Allen is executive vice president, general counsel and secretary for Abbott.
The Cleary Gottlieb team representing CFR on its sale includes partners Andrés de la Cruz in Buenos Aires, Argentina and Neil Whoriskey in New York. Also advising from New York are senior attorney Jennifer Bender and associate Carlos von der Heyde.
Agustin Eguiguren Correa is corporate legal secretary and chief Chilean legal officer of CFR.
Davis Polk & Wardwell is providing legal counsel to CFR financial adviser Deutsche Bank, with a team that includes partners Phillip Mills and Manuel Garciadiaz in New York and Sao Paulo, respectively; and associate Boyoon Choi.
Barclays is serving as financial adviser to Abbott. The company did not respond to a request for details on its legal team.
Abbott’s acquisition of CFR marks the latest in a series of Big Pharma deals, with Bloomberg Businessweek reporting a record $118 billion in mergers, acquisitions and spinoffs announced last month alone as companies seek to lower their tax burden by offshoring headquarters or trying to grow business in the aftermath of patent expirations and slowing growth in the U.S. and Europe that have reduced profits.
Last week, Boston Scientific announced it had agreed to pay $415 million for the interventional unit of Bayer AG of Germany. Latham & Watkins advised Boston Scientific on the deal, according to media reports.
Other recent deals include Merck’s $14.2 million sale of its consumer care business to Bayer in May, which was led by Fried, Frank, Harris, Shriver & Jacobson for Merck, and Sullivan & Cromwell for Bayer.
Abbott itself has been on a tear, last year acquiring Texas-based medical device maker IDEV Technologies for $310 million, with Jones Day advising Abbott and Cooley representing IDEV. Baker & McKenzie counseled Abbott in its $6.2 billion acquisition of pharmaceutical company the Solvay Group in 2010 and its $1.2 billion purchase of TheraSense in 2004. And Wachtell, Lipton, Rosen & Katz represented Abbott in its $55 billion spinoff of AbbVie in 2013.