Mitsui signed an agreement to purchase a 10% stake in R-Pharma

Japanese corporation Mitsui & Co and Russian pharmaceutical company R-Pharm have signed an agreement for the acquisition of a 10% stake in the Russian holding. Furthermore, Mitsui has received an option to acquire, in a consortium with other Japanese investors, an additional 10% of the shares of the Russian pharmaceutical enterprise. The total capitalization of R-Pharm under the deal is estimated at over 200 billion yen ($1.7 billion), reports the news agency RNS.

As clarified by the R-Pharm press service, the agreement is a framework agreement; the deal has not yet been closed, and the final price has not been determined.

"At the moment, there is an agreement to acquire 10%, with a possible expansion to 20% within the next quarter. Mitsui has an option to expand its stake with the possibility of attracting major financial and industrial investors—there are a number of companies and financial institutions that want to join the consortium. We cannot name the companies, but I will say: among them are all leading development institutions, possibly the Russian Direct Investment Fund (RDIF), and several major and iconic Japanese entrepreneurs," RNS quotes Alexey Repik, the founder and owner of R-Pharm.

Repik did not disclose the price of the deal, noting only that the total capitalization of R-Pharm under the deal is estimated at over 200 billion yen ($1.7 billion), writes RNS.

According to Repik, Mitsui is investing specifically in the Russian business because it considers it a priority: R-Pharm's international projects will be excluded from the agreement.

Additionally, during the Russian-Japanese business dialogue, timed with the visit of Russian President Vladimir Putin to Japan, R-Pharm signed an agreement with Fujifilm Corporation to form a large-scale partnership with the possible localization of production and the creation of a joint venture, reports TASS.

As previously reported by the Japanese magazine Nikkei Asian Review, Mitsui believes that the deal with R-Pharm will allow the Russian company to expand its drug portfolio and increase its export potential.

Furthermore, the deal will be one of the steps towards rapprochement between Russia and Japan in terms of economic cooperation, which was disrupted after Japan, following other countries, imposed economic sanctions against Russia in 2014.

News that the Japanese company planned to acquire shares in R-Pharm became known in October 2016. At that time, Mitsui offered to acquire up to 10% of R-Pharm for $96.3 million.

In 2017, Japan and Russia plan to create a joint investment fund with a capital of 100 billion yen (about $880 million). The main investment areas will be urban development and healthcare in Russia, primarily in the Far East.

Mitsui is a major Japanese trading and investment company, founded in 1947. It operates in the fields of energy, chemicals, metallurgy, and consumer goods production. It has 141 offices in 66 countries worldwide. The workforce comprises over 47,000 employees. In the fiscal year ending March 31, 2016, Mitsui's revenue amounted to $45.8 billion.

JSC R-Pharm is a Russian pharmaceutical company. The owner of 100% of the company's shares is Alexey Repik. Its main areas of activity are the production of drugs and biologics, research and development of new drugs and technologies, and the supply of foreign-made medicines to the Russian market. R-Pharm entered the Forbes rating of the 200 largest private companies in the country for 2015. The pharmaceutical company, whose revenue in 2015 increased by 6.5 billion rubles to reach 68.7 billion rubles, ranked 103rd in the list.