Mexico's Grupo Casa Saba to acquire Chile's FASA in $637 million deal

In what has been described as a landmark Latin American pharmaceutical transaction, Mexican drug wholesaler Grupo Casa Saba (GCS) has reached a definitive agreement to acquire the Chilean company Farmacias Ahumada SA in a deal valued at around $637 million, including the assumption of $162 million in estimated net debt as of March 31, 2010.

Under the terms of the accord, GCS will offer an all cash option tender for 100% of FASA common shares, which trade on the Bolsa de Comercio de Santiago, at a price of 1,642 Chilean pesos per share. The tender offer will be contingent upon the successful tender of at least 50.0% plus one of all FASA shares outstanding, and is expected to be financed through a mix of cash and new debt for which GCS has obtained firm commitments from HSBC.

The combined company, which will be consolidated under GCS, will become the leading drugstore chain in Latin America and one of the largest distributors of consumer and pharmaceutical products in the region, with estimated pro-forma revenues of approximately $4 billion and a wide platform of about 1,500 drugstores across Mexico, Brazil, Chile and Peru. GCS reported $2.2 billion in sales in 2009, while FASA generated turnover of $1.65 billion last year.