ASPEN PHARMACARE HOLDINGS LIMITED - Acquisition of Infant Nutritional Businesses from Nestle

Acquisition of Infant Nutritional Businesses from Nestle

ASPEN PHARMACARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1985/0002935/06
Share code: APN
ISIN: ZAE000066692
("Aspen Holdings" or "the Company")


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

Shareholders of Aspen Holdings are advised that Aspen
Group companies (“Aspen”) have concluded agreements with
Nestlé S.A. in respect of the acquisition of certain
rights to intellectual property licenses, net assets and
shares in the IN businesses presently conducted by Pfizer
which distribute a portfolio of IN products in Australia
(the “Australian IN business”) and certain Southern
African territories (South Africa, Botswana, Namibia,
Lesotho, Swaziland and Zambia)(the “Southern African IN
business”) for a total purchase consideration of USD 215
million. The IN portfolio covers all age stages (infants,
toddlers and early childhood) and consists of premium,
specialty and standard ranges supported by strong
umbrella brands including S26 Gold®, S26® and SMA®. The
revenue for the Australian and Southern African IN
businesses amounted to AUD 83 million and ZAR 180 million
respectively in 2012.

The Australian competition authorities have approved
Aspen’s acquisition of the Australian IN business and the
transaction   will   be  effective   in  Australia   from
28 April 2013. The South African and Namibian competition
authorities’ approval of the acquisition of the Southern
African IN business is pending.

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 Australia and Southern Africa;

  -   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 licence
      period,    Nestlé    will    be    precluded    from
      commercialising the licensed products (so-called “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 licence 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

  -   Aspen will be provided with transitional service
      arrangements by Nestlé and Pfizer including the
      manufacture and supply of licensed products under a
      non-exclusive arrangement.   These arrangements will
      provide Aspen with the flexibility to transition the
      manufacture of IN products to its own sources of
      supply including to its own IN manufacturing
      facilities within a 3 year period.

The transaction presents a good commercial and strategic
fit for Aspen, given its heritage with these brands and
its strength in the IN market in South Africa coupled
with its local manufacturing capabilities. In Australia
the transaction will synergistically augment Aspen’s
strong presence in the grocery and over-the-counter
market segments. The transaction will provide Aspen with
an enhanced platform from which to extend the global
footprint of its IN business in the medium term.


Durban
18 April 2013

Investec Bank Limited
Sponsor

The Standard Bank of South Africa Limited
Sole Underwriter and Mandated Lead Arranger

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