Germany's Fresenius Kabi Bets on Booming Indonesian Drug Market

German pharmaceutical company Fresenius Kabi AG on Monday said that it has agreed to buy a 51% stake in Indonesian drug maker PT Ethica Industri Farmasi from PT Soho Global Healthcare, Indonesia's oldest pharmaceutical company.

The statement didn't provide financial details, but a person with knowledge of the deal said it could be worth as much as US$200 million.
With the move, Fresenius Kabi becomes the latest foreign company to invest in Southeast Asia's growing health-care market. With a population of more than 600 million and a growing middle class, the region is attractive to global health-care companies.
Last week, Russia's largest pharmaceutical company, Pharmstandard, said it had reached an agreement to buy Singapore's Bever Pharmaceutical Pte. for US$590 million. In 2010, Malaysian state investor Khazanah Nasional Bhd. paid US$2.6 billion to buy Singapore hospital operator Parkway Holdings Ltd.
Global companies are particularly attracted to Indonesia, where the government plans to begin implementing universal health care by next year. The country's entire population of 245 million is expected to have access to health care by 2019, and the nation's pharmaceutical market is expected to double to 7.1 billion euros (US$9.5 billion) a year by 2018, according to IMS Health data.
"The joint venture therefore provides an attractive platform for Fresenius Kabi's future growth in one of the fastest-growing emerging economies in Southeast Asia," Fresenius Kabi said in the statement.
It said that the transaction is expected to be completed by the third quarter of this year, subject to approval from its supervisory board.
Established in 1950, Ethica Industri Farmasi makes and sells intravenous generic drugs and infusions.
Soho Group, owned by Tan Eng Liang, also controls Soho Consumer Health, which sells over-the-counter medicines and makes herbal products.
Soho Group also distributes pharmaceutical and health-care products in Malaysia, Nigeria, Lebanon, Mongolia, Vietnam and Mauritius.
Fresenius Kabi is a unit of Fresenius Group, which provides products and services for hospital and outpatient medical care internationally, according to its website. The parent company's overall sales totaled 19.3 billion euros (US$25.7 billion) in 2012.
(Source: WSJ)

Fresenius Kabi AG