Bangalore-based Strides Arcolab and Aspen of South Africa have entered into a strategic partnership to enter Latin America market, develop oncology and generic products through a series of transactions.Aspen will be a strategic equal partner in Strides' Latin American operations. The transactions value the Latin American operations of Strides Latina at over Rs 1,000 crore ($260 million).Strides Latina is an operation owned by Strides Arcolab mainly operating in Brazil as Cellofarm and in Mexico as Solara. It has marketing and trading operations in Venezuela as Sumifarma. Latin American operations were initiated in 2000 and generated sales as on December 31, 2006 of $75 million."Aspen will acquire a 50% interest in Strides Latina, a wholly owned subsidiary for Latin American operations through the acquisition of shares from Strides subsidiary for $58.5 million and the subscription to fresh shares for $94 million. While this make the Latin American operations debt free and create a war chest for growth, it will also release substantial cash investments made by Strides in the working capital needs of the Latin American operations," said Arun Kumar, vice-chairman and group CEO, Strides Arcolab.Aspen will also partner Strides for the development and global marketing of oncolytics. The transaction values the subsidiary at Rs 340 crore ($85 million). "Here Strides and Aspen will enter into a 50 % joint venture to develop, manufacture and commercialize oncology products. this will be achieved by Aspen purchasing 50% of the issued share capital of Powercliff from Strides for $25.75 million and subscribing to 49% of the share capital of Onco and debt instruments for $16.7 million. Both powercliff and Onco are owned 100% by Strides," Arun Kumar said.Strides will acquire 51% interest of Co Pharma, Aspen's UK based generics subsidiary, for Rs 23 crore (2.625 million pounds). This will be facilitated by means of the purchase of a portion of Aspen's shareholding in Co Pharma for 2.25 million pounds and the subscription for new shares for 375,000 pounds.Strides will also acquire 80% of Formula Naturelle, a 100% owned subsidiary of Aspen, for Rs 19.7 crore (Rand 35 million), which will own a basket of nutraceutical products currently marketed by Aspen in South Africa."The transactions will position Strides as a solid regional pharma company in Latin America and the oncolytics joint venture will provide us a growth opportunity in a niche and difficult domain," said Arun Kumar.Commenting on the deal, Stephen Saad, group CEO Aspen, said: "We have worked closely with Strides Arcolab since 2003. The close collaboration for the past four years has resulted in Strides becoming a significant manufacturing and development partner to Aspen in both Africa and Australasia.
