Abbott Now Holds Nearly 52% Of Domesco
CFR International SPA transferred nearly 17.95 million shares in the Domesco Medical Import-Export JSC (DMC) to Abbott Laboratories (Chile) Holdco SpA, a subsidiary of Abbott Laboratories in the US, on December 4, according to Vietnam Securities Depository (VSD).
The nearly 17.95 million shares are equivalent to 51.69 percent of DMC’s charter capital. Abbott previously acquired CFR International SPA in 2012/2013, so CFR International SPA’s shares in DMC already belonged to Abbott indirectly.
Due to the dissolution of CFR International SPA, Abbott has now taken back the shares directly, with DMC officially becoming an Abbott Laboratories’ subsidiary.
The State Capital Investment Corporation (SCIC) is the second-largest shareholder after Abbott Laboratories Holdco SpA, which holds 34.71 percent of DMC. The SCIC will sell its stake in DMC in December, which is expected to be completed on December 25.
DMC is the third-largest listed domestic drug maker in Vietnam.
Since Abbott became a major shareholder of DMC’s capital (through CFR), it has sent delegations to work with DMC to support it in production, operations, finances, and human resources. As a result, after the restructuring, DMC’s factories are capable of meeting capacity and business development needs to 2020.
In 2016, DMC recorded revenue of VND1.3 trillion ($57.2 million) and after-tax profit of VND168 billion ($7 million), and paid a dividend of 20 percent in cash. DMC targets 2017 net sales of VND1.4 trillion ($61.6 million) and after-tax profit of VND185 billion ($8.3 million), while paying a dividend of at least 20 percent in cash.
In the 2018-2020 period, DMC aims to achieve average growth of 10 percent. 2018 revenue is expected at VND1.55 trillion ($68.2 million) and after-tax profit at VND200 billion ($8.8 million).
Last year, Abbott also acquired another Vietnamese pharmaceutical manufacturer – Glomed Pharmaceutical Co Inc (Glomed). The merger with Glomed is a key step in Abbott’s strategy to focus on the pharmaceutical business in emerging markets with high growth rates, like Vietnam.
Once holding a controlling stake in Glomed and Domesco, Abbott is likely to make a strong attack on the market for generic drugs in Vietnam. Abbott sees opportunities from health spending in emerging markets, including Vietnam, which accounts for just 6 percent of GDP and continues to grow.
The group aims to grow by 4.6 percent in Abbott’s emerging markets by 2019, more than double the growth rate in the developed world.
Abbott has been in Vietnam for over 20 years and developed a strong business providing science-based healthcare products and services.