How does this deal tie up with Aspen’s existing business?

GUGULETHU MFUPHI: South Africa’s Aspen Healthcare share price shot up by 6% today after it bought several over-the-counter brands from GlaxoSmithKline for over R2bn. To get more perspective on the deal we speak we speak to Asief Mohamed, who’s the chief investment officer at AEON Investment Management. Asief, this seems like a big deal, a massive deal for Aspen. What effect might it have on the company?

ASIEF MOHAMED: I think in the longer term it looks like it’s positive, because it overlaps with a  lot of the regions that they operate in. Brazil is one area, but more importantly south Asia, where they’ve acquired Sigma a year or two ago. And so far initial indications are it’s doing very well. The advantage is also that in the future they are going to produce the products that they’ve bought from GSK in their own manufacturing facilities. And if I look at the financial metrics they’ve put out, it doesn’t look that it’s dilutive at this point in time if they bring through synergies which they normally do on these acquisitions, it could be very positive for Aspen in the longer term.

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