The revenue for the infant nutrition businesses totalled US$187m in 2012

The revenue for the infant nutrition businesses totalled US$187m in 2012

South African pharmaceutical group Aspen Pharmacare has acquired Nestle's infant milk factory in Mexico and licences for some of its brands in Latin America.

The latest deal between Aspen and Nestle will see the South African group gain licence rights to intellectual property, a production facility in Vallejo in Mexico, and shares in the businesses conducted by Nestlé and Pfizer in Latin America, Aspen said.

The transaction follows a similar deal in April that saw Aspen buy licences for some of Nestle's infant milk brands in southern Africa and Australia for A$215m.

The agreement includes the exclusive right of use of the Nestlé S26 Gold and SMA trademarks for ten years in South and Central America. It will also have the right to co-brand the licensed products over the same period.

The revenue for the infant nutrition businesses totalled US$187m in 2012.

Australian competition authorities have approved the acquisition, while South African and Namibian approval is pending, Aspen said.

Show the press release

ACQUISITION OF INFANT NUTRITIONAL (“IN”) BUSINESSES FROM NESTLÉ – VOLUNTARY 

ANNOUNCEMENT 

Further to the announcement released on 18 April 2013 wherein shareholders of Aspen Holdings were advised of a transaction in terms whereof Aspen Group Companies (“Aspen”) would acquire the IN businesses conducted by Nestlé and Pfizer which distribute a portfolio of IN products in Australia and certain Southern African territories, shareholders of Aspen Holdings are advised that additional agreements have now been concluded with Nestlé S.A. in respect of the acquisition of certain license rights to intellectual property, net assets (including an IN production facility located in Vallejo, Mexico) and shares in the IN businesses presently conducted by Nestlé and Pfizer in Latin America, predominantly Mexico, Venezuela, Colombia, Ecuador, Chile, Peru, Central America and the Caribbean (collectively, “the Transaction”). The Transaction includes all age stages (infants, toddlers and early childhood) and consists of premium and specialty ranges supported by strong umbrella brands including S26 Gold® and SMA®. The revenue for the IN businesses amounted to USD 187 million in 2012. The Transaction is subject to certain antitrust conditions.

The nature of the Transaction and the assets relating thereto are set out below:

• Aspen will have the exclusive right of use of the Nestlé (previously Pfizer) S26® and SMA®

IN product trademarks for a period of 10 years (“licensed products”) in those countries in 

South and Central America in which the brands are currently sold; 

• Aspen will also have the right to co-brand the licensed products over the initial 10 year period and to transition these products to Aspen branded products over this period;

• For a further 10 year period, commencing after expiration of the initial 10 year exclusive license period, Nestlé will be precluded from commercialising the licensed products (socalled “10 year black out period”), effectively providing Aspen with a 20 year period to establish equivalent Aspen branded IN products;

• Aspen will have a perpetual license to the IN technology, technical know-how and formulations existing at the effective date plus access to an agreed licensed product pipeline together with related technology developments for a period of 5 years from the effective date; 

There will be a transfer of the ownership in the operating businesses from Nestlé to Aspen and this will include the transfer of the employees within those businesses and ownership of the IN production facility located in Vallejo, Mexico; and 

• Aspen will be provided with transitional service arrangements by Nestlé and Pfizer to assist Aspen in fully integrating the IN businesses into the Aspen business.

Original source: Aspen