Agreement represents another step toward Valeant’s strategy to focus on North America.
Valeant is divesting its Eastern and Western European businesses as well as certain export markets to Meda for $392 million. The move is in sync with Valeant’s strategy over the last two years to focus on North America.
Under the terms of the agreement, Meda will gain Valeant subsidiaries in the aforementioned regions and the rights to all products and licenses currently marketed by Valeant in these areas.
Excluded from this transaction are Valeant’s Central European operations, defined as the business in Poland, Hungary, Slovakia, and Czech Republic. Combined revenues in 2007 for these countries were approximately $120 million, according to Valeant.
“We are still considering all options with respect to our Central European operations,” says J. Michael Pearson, chairman and CEO of Valeant. “This business continues to grow and has many market opportunities to expand from its strong regional base.”
Valeant has already sold its Asia-Pacific and Argentina business, its discovery and preclinical segment, manufacturing facilities in Switzerland and Puerto Rico, as well as cut half its staff.
Meda, on the other hand, gains operations that reportedly had sales of 1,100 SEK, or $181.58. Major markets are Germany, U.K., Italy, Spain, and Russia, both in terms of sales and employees. The majority of the acquired products are also within Meda’s key areas of focus: neurology and dermatology.
The acquisition is expected to be accretive to Meda’s earnings per share already during 2009.