Brookfield Drops Bid to Acquire Healthcare Firm Grifols

The Board of Directors of Grifols, a global healthcare company and leading manufacturer of plasma-derived medicines, has announced the termination of discussions with Canada’s Brookfield Capital Partners (UK) Limited regarding a potential acquisition of Grifols shares.

This followed the statement on November 19 by the Board of Directors of Grifols, based on the recommendation of its Transaction Committee, that it would not recommend shareholders of the company to accept a potential offer from Brookfield with a valuation of $6.82 billion for the entirety of the company’s outstanding share capital (comprising both Class A and Class B shares).

This indicative, non-binding valuation from Brookfield implied a price of $11.05 per Class A share, which was deemed to significantly undervalue the company’s fundamental prospects and long-term potential.

This assessment is supported by the company’s robust financial performance, as highlighted in its Q3 2024 results, which demonstrate Grifols’ strong fundamentals and its ability to capture substantial global demand across key markets.

Year-to-date revenues increased by 9.1% at constant currency year-over-year, driven by solid results across all business divisions and also maintains a solid financial position, Grifols said.

In recent months, Grifols has successfully reduced its leverage, following the repayment of senior secured debt after receiving $1.69 billion from the sale of a 20% equity stake in Shanghai RAAS, along with a notable improvement in EBITDA adjusted, which for the last twelve months reached $1.8 billion.

This announcement comes after a comprehensive due diligence exercise has been conducted, with Brookfield granted access to all requested information. Throughout this period, Grifols provided full access to the company’s data and management, which was sufficient to make an informed assessment of the company’s fundamental value in the context of a potential public tender offer.

To Enhance Long-Term Value

The Board of Directors and management team of Grifols remain fully committed to executing the company’s strategic plan, which is focused on enhancing long-term value.

“In alignment with this commitment, Grifols will soon announce a Capital Markets Day, where it will present its strategic vision under new leadership, alongside key initiatives designed to unlock growth opportunities and drive sustained performance,” the company added.

On the other hand, even Brookfield has notified Spain’s National Securities Market Commission (CNMV) about the termination. It has informed the Grifols Transaction Committee that under the current circumstances it is not in a position to proceed with a potential offer for Grifols,” Brookfield informed the Spain’s market regulator.

Anticipating the successful completion of the deal, Brookfield had secured the financing to launch its takeover bid from Singapore’s sovereign wealth funds, Temasek and GIC – and also explored the possibility of support from the Abu Dhabi sovereign wealth fund. These funds were to cover a ticket of approximately $3.17 billion to complement the fund’s investment.