Abbott Purchase Of Veropharm Highlights Consolidation Trend

BMI View : Abbott's purchase of Veropharm highlights our expectations for consolidation within the Russian pharmaceutical sector. The purchase is also strategic, enabling Abbott to comply with upcoming import-restricting measures through immediate access to local manufacturing capacity. We see M&A activity increasing in Russia as local companies consolidate to achieve scale and MNCs secure local manufacturing capacity to see off future import-restricting rules.

We have highlighted consolidation as an overarching global theme playing out within the pharmaceutical sector. In Russia, this theme holds true, as multinational companies (MNCs) have acquired a number of Russian pharmaceutical companies over the past 2-3 years, catalysed by industry trends and the veil of market access barriers on the horizon. We established that these would force multinationals in Russia to acquire and/or partner with local Russian companies or set up domestic manufacturing capacity. As the Russian pharmaceutical sector has become one of the largest and fastest growing in first-tier emerging markets, the importance of managing market access has become a priority. The acquisition of Veropharm by Abbott Laboratories fits into these overarching trends.

Russian M&A Targets Getting Smaller In Number

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Related sectors of this article: Pharmaceuticals & Healthcare
Geography: Russia

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