US-based healthcare company Abbott has entered into a definitive agreement to acquire Veropharm, a Russia-based pharmaceutical firm.

Under the agreement, Abbott will acquire Garden Hills, which currently owns more than 80% of Veropharm. Garden Hills is expected to own more than 95% when the transaction closes.

The purchase price is between $395m and $495m, depending on Garden Hills’ share ownership of Veropharm at time of close. Abbott will also assume net debt of approximately $136m.

Subject to customary closing conditions and regulatory approvals, the transaction is expected to close in the fourth quarter. Abbott intends to fund it with cash on the balance sheet.

Abbott claims that through this acquisition the company will obtain a portfolio of medicines that is well aligned with its current pharmaceutical therapeutic areas of focus in women’s health, central nervous system, cardiovascular, and gastroenterology, while also adding an offering in the field of oncology.

Following the deal’s completion, Abbott would also set-up a manufacturing presence in Russia through its ownership of Veropharm’s existing production facilities, as well as a new manufacturing facility, which is currently under construction by Veropharm.

Abbott is likely to use its manufacturing expertise to expand Veropharm’s capabilities and enhance the existing infrastructure.It has been operating in Russia since 1978 with its Russian operations headquartered in Moscow.

Image: Abbott global headquarters in Abbott Park, Illinois. Photo: courtesy of Abbott Laboratories.