Richter announced it has purchased a Romanian drug distributor company Dita Group for EUR 14.5m (3.2x its 2005 sales). Through the acquisition, Richter increased its Romanian drug wholesale market share from 1.5% to 4.5%. Competition Authority approval to the transaction is pending. Richter also announced it has obtained the rights of operation for about 60 Romanian pharmacies via gaining ownership in retail companies and pharmacy licenses acquired previously.
Our view: We see the news as mild positive, although we do not expect major price reaction to the news. We see Richter’s efforts to strengthen their market share on the Romanian wholesale and retail drug markets could be justified by these parties’ high bargaining power in the value chain.