STADA Arzneimittel AG — M&A Activity 2012

Aug 15, 2012

News Details

Ad-hoc | 15 August 2012 12:53

STADA signs contract on the sale of two Russian production facilities and thus completes another significant step in the context of ‘STADA – build the future’

STADA Arzneimittel AG / Key word(s): Contract

15.08.2012 12:53

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Bad Vilbel, August 15, 2012 - STADA Arzneimittel AG (hereinafter referred
to as 'STADA'), Bad Vilbel, signed a contract and accompanying temporary
service contracts today, on August 15, 2012, on the sale of two Russian
production facilities, according to which all assets of both Russian
production facilities will be transferred via a sale of STADA's indirectly
wholly owned subsidiaries OOO Makiz Pharma, Moscow, and OOO Skopin
Pharmaceutical Plant, Ryazanskaya obl., to LLC DMN Invest, Moscow, in the
context of a partial management buyout (see the Company's ad hoc release of
August 7, 2012 regarding the approval of the sale by the STADA Executive
Board and the STADA Supervisory Board).

In the context of this disposal, which represents another significant step
in the production restructuring in the context of the Group-wide cost
efficiency program 'STADA - build the future' introduced in 2010 (see the
Company's Ad-hoc release of June 7, 2010 as well as STADA's Annual Report
2011), STADA incurs a one-time burden on earnings in the amount of
approximately Euro 9.0 million before taxes or approximately Euro 7.2
million after taxes, which STADA will report as a one-time special effect
in the third quarter of 2012. This burden is less than the expenses
originally planned in the context of 'STADA - build the future' for the
Russian production restructuring.

The production of all products, which are currently produced for the STADA
Group in both disposed Russian production facilities, will be gradually
transfered to other existing Russian STADA production facilities - expected
to be finalized by the end of 2014 in the context of a program that has
already commenced - whose capacity utilization and cost structure will be
substantially improved on the mid-term as a result. Regarding such products
made for Russian STADA sales companies that are initially still produced in
the sold production facilities during this transitional period,
comprehensive supply and service agreements with the acquirer will ensure a
continued supply for the period required by STADA and largely following the
internal STADA transfer price structure. Following the completion of all
product transfers, STADA expects, from today's perspective, cost
improvements of more than Euro 10 million annually as a result of the
restructuring of the Russian production locations.

Following today's completed signing, the transaction is still subject to
various completion conditions. The sale is strived to be completed in the
fourth quarter of 2012. In the context of the completion, as part of the
restructuring, approximately 182 full-time positions in the STADA
production companies at the locations of both sold production facilities
will be immediately reduced and the affected persons will be employed at
previous conditions by the purchaser in the future. In the context of the
transaction, the purchaser will also assume the contractual obligation for
a further up to approximately 200 full-time positions - which will
initially remain with local STADA subsidiaries at the locations of both
sold production facilities in order to secure the ongoing production and
product transfers - to offer each affected person employment at previous
conditions when they are laid off by the local STADA subsidiaries after
completion of the transfers at the latest. As a result of the total
personnel reduction, STADA could incur further one-time burdens of up to
Euro 2 million by the end of 2014, for which, however, from today's
perspective, a total amount of significantly less than Euro 1 million is
expected.

Due to the sale of the Russian plants STADA will reach a significant
restructuring goal of the 'STADA - build the future' program earlier than
planned, presumably within the current financial year 2012, namely the
reduction of the number of personnel of 2010 by approximately 10%
(corresponding to approximately 800 full time positions) throughout the
Group by the end of 2013.

Additional information:
STADA Arzneimittel AG / Corporate Communications / Stadastraße 2-18 / D -
61118 Bad Vilbel /
Tel.: +49(0) 6101 603-113 / Fax: +49(0) 6101 603-506 / E-Mail:
communications@stada.de /
Or visit us in the Internet at www.stada.com

15.08.2012 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: STADA Arzneimittel AG
Stadastraße 2-18
61118 Bad Vilbel
Germany
Phone: +49 (0)6101 603- 113
Fax: +49 (0)6101 603- 506
E-mail: communications@stada.de
Internet: www.stada.de
ISIN: DE0007251803, DE0007251845,
WKN: 725180, 725184,
Indices: MDAX
Listed: Regulierter Markt in Düsseldorf, Frankfurt (Prime Standard);
Freiverkehr in Berlin, Hamburg, Hannover, München, Stuttgart

End of Announcement DGAP News-Service

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