Key facts about the acquisition
Background and rationale for the acquisition
Brazil is the largest market for diabetes care products in Latin America, and diabetes is a growing problem in Brazil with more than five million Brazilians affected by the disease today. In 2000, sales of diabetes care products in the Brazilian market were estimated at USD 133 million. Sales of insulin products accounted for an estimated USD 42 million, and oral anti-diabetic drugs (OADs) accounted for an estimated USD 91 million. The insulin market is expected to grow by 6.4% from 2000 to 2001, and the market for OADs is expected to grow by 6% in the same period.
Headquartered in Montes Claros, 300 kilometres north of Belo Horizonte in the Brazilian state Minas Gerais, Biobrás is a well-established player in the Brazilian diabetes care market. Key products include animal and human insulin as well as the OAD Glucoformin (metformin). In 2000, Biobrás had a turnover of BRL 58 million (USD 24 million/DKK 202 million) and an operating profit of approximately BRL 3.1 million (USD 1.3 million/DKK 10.8 million). Biobrás employs 568 people, most of whom work in Biobrás' insulin production plant in Montes Claros.
Novo Nordisk employs 77 people in Brazil. In 2000, Novo Nordisk's turnover in Brazil was DKK 208 million (USD 25 million), 82% of which came from diabetes care products.
Together, Biobrás and Novo Nordisk will have a local production base, an experienced diabetes care sales force, and a highly competitive portfolio of diabetes care products in Brazil. The partnership will be a solid platform for future launches of new diabetes care products from Novo Nordisk's pipeline to the benefit of people with diabetes in Brazil and Latin America in general.
Lars Rebien Sørensen, president and CEO of Novo Nordisk, said: "The investment in Biobrás reflects Novo Nordisk's commitment to the Latin American market and our goal of being the Latin American leader in diabetes care."
Guilherme Emrich, chairman of Biobrás, said: "We believe that by combining Biobrás' knowledge of the Brazilian market and our excellent relations to the Brazilian diabetes community with Novo Nordisk's expertise in the research and development of new diabetes care products, the two companies will be better positioned to improve the lives of people with diabetes in Brazil and other countries in Latin America."
Details of the transaction
Details of the transaction
Novo Nordisk will acquire the shares in Biobrás S.A. that are currently held by Biopart Ltda., a Brazilian limited liability company owned by the founders of Biobrás, for an aggregate consideration of BRL 53 million (USD 22 million/DKK 184 million). Furthermore, subject to the above-mentioned acquisition, Novo Nordisk will acquire shares in Biobrás held by the Brazilian National Development Bank, for an aggregate consideration of BRL 22.4 million (USD 9.3 million/DKK 77.9 million). In total, the acquired shares represent 76% of the voting shares of Biobrás and 39% of the total capital of Biobrás.
Prior to the closing of these acquisitions, a demerger of Biobrás is expected to be approved at an extraordinary shareholders' meeting on 29 December. The demerger will imply a spin-off into a new legal entity of a US patent for a recombinant insulin manufacturing process expressed in bacteria, as well as certain assets related to the patent and a cash amount. The acquisitions are conditional on approval of this demerger, which according to Brazilian company law can be obtained by the votes of the shares currently owned by Biopart. The new entity formed by virtue of the demerger is outside the scope of Novo Nordisk's acquisitions.
Following the completion of the acquisitions, Novo Nordisk plans to launch a de-listing tender offer for all of the remaining shares. The de-listing will be subject to approval by Biobrás' shareholders, whereas the tender offer will be subject to prior approval of the Brazilian Securities Commission (CVM).
The acquisitions made by Novo Nordisk, leading to the controlling stake in Biobrás, will be subject to clearance by the relevant Brazilian anti-trust authorities. This clearance is anticipated during the first half of 2002.
Impact on financial expectations for Novo Nordisk
Impact on financial expectations for Novo Nordisk
The agreement will not impact Novo Nordisk's expectations for the financial results for 2001, and the company's four long-term financial targets, announced in February this year, also remain unchanged.
Novo Nordisk is a focused healthcare company and the world leader in diabetes care. In addition, Novo Nordisk has a leading position within areas such as coagulation disorders, growth disorders and hormone replacement therapy. Novo Nordisk manufactures and markets pharmaceutical products and services that make a significant difference to patients, the medical profession and society. With headquarters in Denmark, Novo Nordisk employs approximately 16,000 people in 68 countries and markets its products in 179 countries. Novo Nordisk's B shares are listed on the stock exchanges in Copenhagen and London. Its ADRs are listed on the New York Stock Exchange under the symbol 'NVO'. For further company information, visit www.novonordisk.com.
For further information please contact:
Media:
Outside North America:
Karsten Madsen
Phone (direct): (+45) 4442 4137
In North America:
Susan Jackson
Phone (direct): (+1) 609 919 7776
Susan Jackson
Phone (direct): (+1) 609 919 7776
Investors:
Outside North America:
Peter Haahr
Phone (direct): (+45) 4442 1207
Outside North America:
Peter Haahr
Phone (direct): (+45) 4442 1207
Palle Holm Olesen
Phone (direct): (+45) 4442 6175
Phone (direct): (+45) 4442 6175
Stock Exchange Announcement No 24 / 2001