Faseeh Mangi
Wed, July 5, 2023
(Bloomberg) -- Pakistan’s OBS Group is nearing a deal to acquire pharmaceutical assets in the country from Bayer AG, according to people familiar with the matter.
The Karachi-based pharmaceutical maker is close to buying a manufacturing facility in Lahore and 12 pharmaceutical brands for about 7 billion rupees ($25 million), said one of the people, asking not to be identified as the information is private. OBS Group has incorporated a new unit that is partially owned by employees for the acquisition, they said. The transaction could close in the coming days, the people said.
Following the Bloomberg News report, shares of AGP Ltd., a subsidiary of OBS Group that also manufactures and markets pharmaceuticals, climbed to their highest level in five months.
Bayer is in the process of transferring its pharmaceutical and consumer health manufacturing plant based in Lahore, as well as selected pharmaceuticals and consumer health brands, to an international diversified company with a strong presence in Pakistan, according to a statement in response to a query from Bloomberg News. Impacted Bayer Pakistan employees have already joined the acquirer with effect from July 1, with a two-year job guarantee and bonuses, the statement showed.
Bayer representatives declined to comment on the name of the buyer or size of the transaction. Representatives for OBS didn’t respond to requests for comment.
The development comes as the South Asian nation is going through its worst economic crisis, with record interest rates and sky-high inflation. Shell Plc, one of the oldest multinational companies with operations in Pakistan, is also selling its stake in its local unit, while Sanofi divested majority ownership of its local arm last year for about $23 million.
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Drug prices in Pakistan are fixed and regulated by the government, which pharmaceutical companies have cited as a hurdle to their operation in the country.
--With assistance from Naomi Kresge.
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