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Sigma to sell pharma division to Aspen

Australian Sigma Pharmaceuticals has agreed to sell its drugs unit to Aspen, Africa's largest drug maker, for A$900m (£513m/$801m)

Australian Sigma Pharmaceuticals has agreed to sell its drugs unit to Aspen, Africa's largest drug maker, for A$900m (£513m/$801m).

The deal will see Sigma's generics, consumer, Herron Pharmaceuticals, ethical products, medical products, orphan and manufacturing businesses transferred to Aspen, while Sigma will maintain control of its healthcare business.

South Africa-based Aspen says it expects the deal will lead to cost savings by allowing the company to create its own generic and over-the-counter products in Australia. The acquisition will make Aspen the largest manufacturer of prescription pharmaceuticals in Australia and give the company a strong foothold in the Asia Pacific market.

Brian Jamieson, chairman of Sigma, said: "Over recent months, the Board has carefully considered a number of expressions of interest in relation to the whole of Sigma's business and parts of the Group. The Board has concluded that Aspen's proposal to acquire the pharmaceuticals division is the best alternative for Sigma shareholders."

The deal is subject to various conditions including shareholder approval, lender approval, regulatory approval and preparation of definitive sale documentation. Under the terms of the agreement, Sigma will agree not to compete with the pharmaceuticals division for a period of two years.

Other aspects of the deal include: Sigma having a long-term preferred supplier status with the pharmaceuticals division; Aspen supporting Sigma's existing pharmacy sales programmes and providing contract manufacturing services and Sigma providing wholesaling, distribution, information technology and logistics services to the businesses acquired.

16th August 2010

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