Temasek 'exploring $1.34b Zuellig Pharma stake sale'

According to people familiar with the matter, Singapore's Temasek Holdings has been speaking to advisers about a potential sale of its 20 per cent stake in Asian drug distributor Zuellig Pharma.
According to people familiar with the matter, Singapore's Temasek Holdings has been speaking to advisers about a potential sale of its 20 per cent stake in Asian drug distributor Zuellig Pharma.PHOTO: REUTERS

Interest could come from strategic buyers, such as Mitsui & Co, and private equity firms

HONG KONG • Temasek Holdings is exploring a sale of its stake in Asian drug distributor Zuellig Pharma, people familiar with the matter said.

Singapore's investment company has been speaking to advisers about a potential sale of its 20 per cent stake in Zuellig Pharma, which commands vast pharmaceutical distribution networks in about a dozen Asian markets, according to the people.

Temasek may seek around US$1 billion (S$1.34 billion) for its holding in the Singapore-based company, the sources said, asking not to be identified because the discussions are private.

The stake could draw interest from strategic buyers, including Mitsui & Co, the Japanese trading house that has been expanding its healthcare operations, as well as private equity firms, the people said.

Zuellig Group was founded in 1922 by businessman Frederick Zuellig, who moved to Manila from Switzerland. The family trading house built a number of different businesses and now has interests ranging from healthcare and pharmaceuticals to insurance and property, according to its website.

Zuellig Pharma generated US$10 billion in sales in 2015, and had 10,000 employees.

Temasek first invested in Zuellig Pharma in 2007.

RIVAL'S FUTURE PLANS

They are one of our key competitors, because they are particularly strong in the Philippines and in Indonesia, and even the other markets. We assume that they are dealing with the recent changes and making up their minds on how they want to take the company forward.

MR STEFAN BUTZ, chief executive of DKSH Holding, on Swiss rival Zuellig Pharma.

Deliberations are at an early stage, and there is no certainty they will lead to a transaction, the people said.

Representatives for Temasek and Mitsui declined to comment, while a representative for Zuellig Pharma said she could not immediately comment.

The death of family patriarch Stephen Zuellig in January fuelled speculation that his group could be put on the block.

Mr Stefan Butz, chief executive officer of Swiss rival DKSH Holding, said in July he would be interested in starting talks if Zuellig Pharma officially came up for sale.

"They are one of our key competitors, because they are particularly strong in the Philippines and in Indonesia, and even the other markets," Mr Butz said in response to an analyst's question on an earnings conference call. "We assume that they are dealing with the recent changes and making up their minds on how they want to take the company forward."

A representative for DKSH declined to comment.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on November 29, 2017, with the headline 'Temasek 'exploring $1.34b Zuellig Pharma stake sale''. Print Edition | Subscribe