Joint treatment: why Rostec and Marathon Group combine their assets

State Corporation Rostec will unite its pharmaceutical business with the assets of Marathon Group owned by Alexander Vinokurov. It's planned to finish the deal before the end of the year.
Origin source
State Corporation Rostek and the investment Marathon Group have agreed to pool their pharmaceutical assets to "create a manufacturer and supplier of federal medicines." The corresponding agreement was signed by the general director of "Rostekh" Sergey Chemezov and the president of "Marathon Group" Alexander Vinokurov. This is stated in the joint report of the companies.

The combined structure will include the enterprises of the holding company "Natsimbio" (included in Rostekh) and the distribution and production assets of Marathon Group, in particular one of the largest Russian distributors of SIA Group. It is assumed that the corporate platform will be made by "Natsimbio", other significant parameters will be determined during the evaluation of assets and structuring the transaction.

The deal is planned to be closed by the end of the year, as a result of it, "Marathon Group" will receive "a significant share of the company's shares," a representative of Rostek told RBC. According to RBC, a source familiar with the negotiations, the deal will be conducted through an additional issue of shares of "Natsimbio", which will be bought by "Marathon Group". "Now we are assessing the assets on both sides, after which the final proportion of ownership between shareholders will be determined," the source said.

"As a result [of the transaction], Russia's largest producer and supplier of a number of important medicines will be created. These measures are aimed at further strengthening the biological safety of the state, reducing the country's dependence on imported drugs and vaccines, "Chemezov said in the message. "Marathon Group" will be able to bring its advanced logistics to the company, explains the representative of "Rostekh". Currently, the incoming to the holding "SIA International" 30 thousand delivery points and 39 regional offices.

For more than five years Rostek has been talking about the creation of a state distributor, which would only deal with government supplies, says Sergey Shulyak, CEO of DSM Group. Joining a large distributor is a logical step for the state corporation, says Shulyak

"Rostec" created "Natsimbio" in 2013. Soon after the creation of "Natsimbio", the government handed over the company to the largest vaccine manufacturer NPO "Microgen", as well as state-owned pharmaceutical manufacturers "Fort" and "Synthesis". In 2014, "Nazimbio" became the only supplier of drugs for tuberculosis for the Federal Penitentiary Service, and in 2015 - vaccines and vaccinations included in the national calendar. In 2016, the company also became a monopoly supplier of blood products on public procurement. 

Long relationships

"Нацимбио" and "Marathon of Groups" already work together. The companies jointly own the shares of Sintez: Marathon Pharma (subholding Marathon Group, managing the group's pharmacies) holds 52% of the company's shares, while Natsimbio holds 32.39%. Share in the "Synthesis" went to Vinokurov after buying a controlling stake in the pharmaceutical distributor "SIA International" in 2016. In addition, in 2017, Marathon Pharma acquired a controlling stake in Fort, where 25% already belonged to Nacimbo.

"The deal actually formalizes long-standing relations between the companies," says Nikolay Bespalov, RNC Pharma Development Director. "SIA International" has already been involved several times as a partner of "Natsimbio" for a number of state contracts, "Bespalov said. - "Natsimbio" with the help of "Marathon Farm" will significantly expand its competence - without its own logistics it is very difficult to implement plans to form a single supplier. "

The positions of the united structure on the market are unlikely to improve quickly, for this it is necessary to do a lot of work to develop the product component, Bespalov believes. "But on the financial results, the merger will immediately have a positive impact," he adds.

Vinokurov created the "Marathon Group" in early 2017. Prior to that, he headed A1, the investment division of Alfa Group. "Marathon Pharma" became the first subholding in the group, it included the pharmacies of a businessman - in addition to distributing "SIA Group" and shares in "Fort" and "Sintez", the company "Biocom", managing pharmacy chains "Mega Pharm", as well as producer Household antiseptic means "Bentus laboratory" (brand Sanitelle). Now "Marathon Farm" produces 350 names of medicines.