Brazilian pharmaceutical company EMS has offered to join forces with rival Hypera to create the country’s biggest drug manufacturer, they said on Monday.
In a securities filing, Hypera said its board will assess the offer, including the hiring of external advisors. The merger could be confirmed within 30 days, EMS said.
Hypera shares closed up nearly 2%, rebounding from a drop of as much as 17% before the news.
Privately owned EMS proposed buying up to 20% of Hypera shares, valuing them at 30 reais each, along with a stock swap.
The offer represents a nearly 17% premium over the stock’s closing price from Friday. The company did not elaborate on the stock swap.
EMS said the companies operate in similar markets and each reported about $1.4 billion in net revenue in the 12 months through June, but noted that their main business priorities diverge.
Hypera focuses on over-the-counter medications, while EMS’s main business is generic drugs.
In the proposal, EMS said it did not expect antitrust regulators to impose restrictions on the merger.
Hypera’s shares fell earlier on the company’s news on Friday that it planned to optimize its working capital, including reducing the deadline for customers to pay for its products.
EMS said the proposed merger should accelerate the plan while reducing its negative short-term sales impact.
The combined company would be listed in Brazil and have a nine-member board, including five chosen by EMS and four by Hypera. Executives from the partners would fill top management positions in the new company, EMS said.
Source: Reuters.com