Bausch Health to sell Amoun unit to ADQ for $740m

Bausch Health Cos. is selling its Egyptian drug unit to Abu Dhabi sovereign wealth fund ADQ for $740m, part of the Canadian company’s effort to pare down debt.

The sale of Amoun Pharmaceutical Co., a leading domestic drugmaker in Egypt, comes ahead of the planned separation of the company’s Bausch & Lomb eye-care division. The sale to ADQ is expected to close in the first half of 2021, Bausch said in a statement on Wednesday.

Bloomberg News reported in October that ADQ was exploring a potential acquisition of Amoun.

“The sale of Amoun marks significant progress in our efforts to reduce overall Bausch Health debt as we continue to pursue all opportunities to drive value for our shareholders, including preparing for the spinoff of Bausch & Lomb,” chief executive officer Joseph C. Papa said in the statement.

Bausch’s US-listed shares rose as much as 2.9 per cent to $31.93 in New York trading. The stock slid 30 per cent last year and is up more than 50 per cent so far this year.

In a note published on Wednesday before the sale announcement, Bloomberg Intelligence analyst Ann-Hunter van Kirk said the solo Bausch & Lomb could be worth $20bn to $30bn, considerably more than Bausch Health’s market capitalisation of about $11bn.

“An independent Bausch & Lomb unit could have more room and focus to expand its global market share, but leverage reduction may still be a priority after its spinoff,” she said.

Investment Spree
For ADQ, the purchase extends an investment spree in sectors deemed strategic for the emirate and underscores the wealth fund’s rise to become one of the Abu Dhabi government’s principal vehicles to fast-track efforts to diversify the oil-dependent economy.

With an estimated $110bn in assets, it’s now Abu Dhabi’s third-largest sovereign wealth fund after Abu Dhabi Investment Authority and Mubadala Investment Co.

“ADQ aims to develop an integrated health-care and pharma value chain through strategic investments and new ventures both locally and internationally,” Fahad Al Qassim, executive director for health care and pharma at ADQ, said in a statement.

Although its focus is largely domestic, ADQ is increasingly looking beyond the United Arab Emirates following its decision to buy a 45 per cent stake in agricultural firm Louis Dreyfus Co. and backing a regional supermarket chain’s expansion into Egypt.

It also bought a food firm in Jordan. Abu Dhabi is the capital of the UAE.

The Amoun deal also follows an agreement in 2019 between the UAE and Egypt to set up a $20bn investment platform to invest in a range of sectors.