VILNIUS - Lithuania's competition watchdog gave a green light for Sanitas, the country's largest pharmaceutical producer and retailer, to acquire up to 100 percent in Endokrininiai Preparatai, the Kaunas-based drug maker.
"The concentration pursued by Sanitas will neither lead to nor strengthen the dominant position on the market, nor will it result in a curbing of competition on respective markets," the competition council announced on June 3.
Sanitas, which has been aiming to strengthen its position in the domestic pharmaceutical market, acquired 39.96 percent of Endokrininiai Preparatai in the spring.
Finansu Spektras, a subsidiary of Finasta brokerage, purchased an additional 12.04 percent in the company.
Olfaneks, a Latvian company that controlled 30.89 percent in Endokrininiai Preparatai, divested its interest, while Valery Malygin, Olfaneks' chairman, sold another 21.11 percent of the Kaunas drug maker.
The transaction's financial details have not yet been disclosed.
Sanitas' decision on raising its stake in Endokrininiai Preparatai further would depend on the price offered by small shareholders, as well as the company's own strategy, said Sanita CEO Donatas Jazukevicius.
Jazukevicius noted that Endokrininiai Preparatai might eventually be integrated into Sanitas.
Sanitas last week reported sales of 16 million litas (4.64 million euros) for the first five months of 2004, a 30 percent rise in sales from the same period last year. Revenues from exports grew 31 percent year-on-year to 12 million litas, powered by a 53 percent surge in sales (11 million litas) to Latvia's Grindex.
The company said earlier that it was projecting a net profit of 2.7 million litas for 2004, more than a fourfold increase from the previous year. It expects 27.7 percent growth in annual sales this year to 39.76 million litas.
Kremi, a member of the Lithuanian investment group Invalda, is the major shareholder of Sanitas. Invalda owns 25 percent in Kremi and 75 percent in Finasta.
Sanitas reported an audited net profit of 624,600 litas (180,000 euros) on a turnover of 30.9 million litas for 2003.
Endokrininiai Preparatai announced losses of 647,500 litas for the same period, though this was a threefold decline from losses of 2 million litas recorded for the previous year. The company managed to trim its losses despite a 16.4 percent decline in sales, which amounted to 8.9 million litas in 2003.
