South African consumer goods group Tiger Brands said on Monday it had reached agreement to sell 50% plus one share of its unit Adcock Ingram Critical Care to Swiss group Baxter Healthcare.
Shares in Tiger Brands rose as much as 4% and by 7.27am GMT was trading 2,74% higher at R147,95. The JSE Top-40 index rose 1,04%.
The group said it entered into a call option shares deal with Baxter worth no more than R4,8-billion.
”The parties intend for the sale of the call option shares resulting from the exercise of the call option to be concluded in January 2011,” Tiger Brands said in a statement.
The group added that if Baxter exercise the call option and the sale is implemented, Adcock Ingram will have a put option to sell its remaining stake in the business to Baxter.
Both companies, however, have agreed that if Baxter doesn’t exercise its call option, the relationship between Baxter and Adcock Ingram will continue for the remainder of the 15 year period.
The proposed sale is subject to approval by competition authorities.
Meanwhile, Tiger Brands said it would unbundle its entire stake in Adcock Ingram and float the unit on the Johannesburg Stock Exchange on August 25.
It added that Adcock Ingram will be listed with a total net debt of about R250-million.
”The unbundling and subsequent listing of Adcock will create a focused, leading independent South African healthcare company,” Peter Matlare, Tiger Brands’ chief executive, said. ”The listing will enhance the strategic flexibility of Adcock so as to enable it to embark on its own strategy to grow by acquisition and internationalise the healthcare business.”
Tiger Brands said the unbundling and listing of Adcock Ingram would enable it to focus on its core fast-moving consumer goods activities.
The group said the unbundling and listing of Adcock Ingram also would enable its unit to embark on its own strategy to grow by acquisition and make its healthcare business more global.
Adcock Ingram said in a statement that it plans to develop across sub-Saharan Africa and make acquisitions in selected markets.
It also plans capital expenditure in the next three years of about R850-million, which will be funded from internal resources. – Reuters