EMS proposes acquisition of stake in Hypera Pharma in deal that could create pharmaceutical giant in Latin America

On Monday (21), Hypera Pharma informed the Brazilian Securities and Exchange Commission (CVM) that it had received a proposal for the acquisition of shares and a business combination from NC Farma Participações S.A., the holding company that controls the pharmaceutical company EMS. The potential merger could result in the creation of one of the largest pharmaceutical companies in Latin America.

Valued at R$30.3 billion, EMS has proposed acquiring up to 20% of Hypera’s shares, which is currently valued at approximately R$27.2 billion. If approved by Hypera’s Board of Directors and by CADE (Administrative Council for Economic Defense), the new company would have combined revenue of R$15.85 billion and an EBITDA (earnings before interest, taxes, depreciation and amortization) of R$5 billion.

Impact on the medical cannabis market

Hypera Pharma stands out in the medical cannabis market, accounting for 14.5% of sales of cannabis-based products in Brazilian pharmacies, consolidating its position as the second-largest player in this segment. According to data from Close-Up International Brasil, Hypera’s cannabis product sales grew 388% over a 12-month period through June 2024, reaching revenue of R$28.45 million.

Hypera’s cannabis-based products are currently available in 7,849 points of sale across Brazil, expanding patient access to these treatments.

Details of the operation

EMS, the leader in Brazil’s generic drug market, was founded in 1964 and is now one of the country’s largest pharmaceutical conglomerates, reporting net revenue of R$8 billion and EBITDA of R$2.8 billion in 2023. The company has a diversified portfolio of more than 2,500 products, including generics (42%), similar drugs (16%), prescription medicines (25%), institutional sales (16%), and over-the-counter products (2%). EMS operates five manufacturing plants and two major distribution centers.