The largest privatisation in the pharmaceutical industry, the sale of 53 percent in Antibiotice Iasi, held by AVAS, has been put on stand-by by the Assets Resolution Authority again. The international players attracted by the production capacities in Iasi could thus miss the last opportunity to buy into the market with the fastest growth rate in the region.
The latest transactions in the pharmaceutical industry, the takeover of Terapia, Sindan and LaborMed, which jumped to over 500 million euros within two years, have created the right environment for the privatisation. On the other hand, a greenfield investment is not an option international players looking to establish a presence in Romania want to consider.
For instance, Icelandic giant Actavis, the majority shareholder of the former Sindan factory, gave up plans for a 50 million-euro investment in a cancer drugs unit, while Swiss company Sandoz could choose another destination. Europe is now experiencing production congestion, so that all the companies seeking to expand prefer to do it via acquisitions.
Hungary's Gedeon Richter group, the only integrated structure in the Romanian pharmaceutical industry has developed only through acquisitions on this market.
The company earned its place among the top ten players on the distribution segment with acquisitions alone, worth in the region of 30 million euros. The Hungarians own a network of more than 70 drugstores on the retail segment, which they built up from takeovers.
The privatisation process of Antibiotice, now at the stage when bids to participate in the tender are submitted, has been put on hold for the time being, with the State Assets Resolution Authority (AVAS) set to choose another way for the sale of the 53 percent after they decided to call off the auction.
"The resumption of the privatisation process does not entail additional expenses on the part of AVAS. The legal and economic consultancy that was part of the privatisation process is still valid, as is the promotional campaign to attract investors," an AVAS release reads.
The institution did not specify the timeframe when the process was supposed to resume.
The privatisation method and even the privatisation itself caused uproar on the part of the business and economic environment. The union members of the company in Iasi even filed a suit challenging the privatisation method and the court found in their favour, while the Association of Businesspeople in Romania (AOAR) called for a public debate on this issue.
Antibiotice is the last company in the pharmaceutical industry where the state owns shares, which allow it to indirectly control production and the price of an extremely important segment of the medical industry: anti-infectious drugs (antibiotics).
In 2007, Antibiotice accounted for 3.1 percent of a drug market estimated at 1.8 billion euros.
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