Aspen signs R10 billion deal with MSD

Oss, Netherlands – JSE Limited listed Aspen Holdings is pleased to announce that the Aspen Group (“Aspen”), the ninth largest generic pharmaceutical company in the world, has:

  • signed an agreement with MSD (known as Merck in the United States and Canada) for the acquisition of an active pharmaceutical ingredient (“API”) manufacturing business which manufactures for MSD and the market generally and which is located in the Netherlands with a satellite facility and sales office in the US (“the API Business”); and
  • reached an agreement on an option to acquire a portfolio of 11 branded finished dose form molecules (“the Products”) from MSD, covering a diverse range of therapeutic areas and including products that use APIs manufactured by the API Business.

(collectively “the Transaction”)

Stephen Saad, Aspen Group Chief Executive, said “One of Aspen’s primary strategic intents is to further globalise its business, increase its representation across a number of additional territories and provide support to its growing global presence with a differentiated pipeline. This Transaction provides a platform to contribute to the achievement of this strategic intent by enabling Aspen to access a niche range of APIs and finished dosage products.”

The Transaction, which is subject to conditions precedent, is valued at approximately US$1 billion (ZAR10.06 billion at ZAR10.06/US$) and comprises the following elements:

In respect of the API business:

  • Aspen Holdings will acquire the shares of a new Dutch company (“Dutch Newco”) containing the API Business for a consideration of approximately €36 million (ZAR472 million at ZAR13.11/€); and
  • Dutch Newco will simultaneously acquire inventory with an expected value of approximately €300 million (ZAR3.9 billion at ZAR13.11/€).

In respect of the Products:

Aspen Global Incorporated, a wholly owned subsidiary of Aspen Holdings, has the option to acquire the Products by way of the exercise of a call option with a resulting asset purchase for a consideration of US$600 million.

The effective date of the API Business acquisition is expected to be 1 October 2013 while the expected effective date of the Products acquisition through the exercise of the option is 31 December 2013.


The Transaction, other than certain deferred payments for the MSD inventory and the Products, will be funded from new debt facilities which are at an advanced stage of negotiation. It is planned to fund the deferred payments from Aspen’s existing cash at the time payment is due.

The API Business:

The API Business consists of manufacturing operations within existing MSD sites comprised as follows:

  • In Oss, the Netherlands, parts of the Moleneind and De Geer sites as well as the entire Boxtel site; and
  • Sioux City, Iowa, in the US.

The business also has sales offices at the Oss site in the Netherlands and in Des Plaines, Illinois, in the US.

The products manufactured at the sites fall into two categories, namely biochemicals, where biological processes are involved, and chemicals where the process is fully synthetic. The API Business recorded pro-forma revenue of €284 million in the year ended 31 December 2012.

The Products:

The Products comprise a portfolio of 11 branded finished dosage form molecules, covering a diverse range of therapeutic treatments. The main brands being acquired, by therapeutic area, are:

Therapeutic Category Brands
Hormone replacement therapy Ovestin, Sustanon, Metrigen
Anti-Coagulant Oragan
Cortico-Steroid Decadron, Oradexon, Metricorten, Meticortelone
Anabolic steroid Deca Durabolin
Hyperthyroidism Thyrax, Strumazol
Oral Contraceptives Gracial, Novial
Vitamin B Complex Benutrex

MSD reports that the products which are the subject of the transactions recorded revenue of US$ 248 million in its financial year ended 31 December 2012. More than half of this revenue was generated in Aspen’s key strategic regions of Latin America and Asia Pacific with Europe being the other large territory.

The Products will be initially manufactured under the pre-existing MSD manufacturing arrangements in terms of a medium term supply agreement between Aspen Global Incorporated and MSD.


The following considerations support the rationale for the Transaction:

  • The API Business manufactures heparin, the API used in the manufacture of Fraxiparine, one of the products for which Aspen has made an offer to GSK (refer to Aspen’s cautionary announcement of 18 June 2013);
  • The API Business manufactures the APIs used in a number of the products Aspen will be acquiring under the Transaction, allowing for effective vertical integration;
  • MSD will continue to acquire APIs from Aspen under a 10-year supply contract which will provide significant on-going volumes for the API Business;
  • Aspen plans to improve the cost competitiveness of the APIs;
  • There are opportunities for Aspen to develop finished dosage form products from certain of the APIs such as hormones and peptides;
  • The Products will complement Aspen’s existing portfolio and will provide critical mass to the Aspen offering in a number of markets. This will allow for additional promotional impetus to Aspen’s portfolio of global brands; and
  • These niche Products will substantially supplement Aspen’s growing footprint in a number of emerging and established markets – the notable presence of these products in Latin America and Asia Pacific is supportive of Aspen’s aspirations for these regions.










Closed Period

Aspen is in a closed period from 1 January until the publication of our interim results on the JSE SENS platform scheduled to be released on 1 March 2023.

The live presentation will take place in Cape Town at 08h30 on 2 March 2023.