Hypermarcas SA (HYPE3.SA), Brazil’s most diversified pharmaceutical firm, has agreed to sell a diaper business to Belgium’s Ontex Group NV (ONTEX.BR) for about 1 billion reais ($300 million) in cash, a person with knowledge of the transaction said on Wednesday.
According to the person, who requested anonymity because terms of the deal remain private, the sale could be announced as early as Thursday. A public relations executive for São Paulo-based Hypermarcas did not have an immediate comment.
Last year, Hypermarcas hired advisers to gauge a spin-off or an outright sale of the unit. The sale, which took a year longer than expected, came as the diaper unit’s performance suffered with a lack of scale and brand recognition and soaring costs for raw materials amid a sharp drop in the Brazilian currency.
Reuters reported in October last year that Hypermarcas had offered the unit to Kimberly-Clark Corp (KMB.N), Chile’s Empresas CMPC SA CAR.SN, Procter & Gamble Co (PG.N) and Svenska Cellulosa SCA AB (SCAb.ST). The deal, from which Hypermarcas sought 1.5 billion reais, was halted a few months later amid price divergences and tax issues, people familiar with the decision said in recent months.
Apart from consolidating Hypermarcas’ exit from disposable goods, the deal also marks Ontex’s entry into Latin America’s No. 1 economy following the takeover of Mexico’s Grupo P.I. Mabe SAB in March. Founded in 1981, Ontex is moving into so-called growth markets to counter feeble activity in Western Europe, the Middle East, and Russia.
Ontex’s press officer was not immediately available for comment after normal business hours.
SOLE FOCUS
Shares of Hypermarcas has risen 15 percent this year, lagging behind a 33 percent jump in the benchmark Bovespa stock index.BVSP. Part of that reflects the impact of Brazil’s harshest recession since the 1930s and political turmoil on consumer goods and pharmaceutical firms such as Hypermarcas.
Over the past couple of years, Chief Executive Officer Claudio Bergamo has focused Hypermarcas solely on drugs, after being likened to Unilever Plc (ULVR.L) only a few years ago.
Bergamo, under the blessing of controlling shareholder and Chairman João Alves de Queiroz Filho, spearheaded a spree of two dozen acquisitions in the drug, home-cleaning, beauty care and processed food industries at the end of last decade.
Currently, Hypermarcas is one of Brazil’s leading producers of over-the-counter and generic drugs.
Recent Articles on M&A
Source: Reuters.com