AGOSTINI’S Ltd, a publicly listed company that is majority owed by the Mouttet family, announced yesterday that its pharmaceutical distribution subsidiary, Smith Robertson, acquired 100 per cent of a smaller pharmaceutical distributor, Oscar Francois Ltd, and an associate company.
The acquisition will further increase Agostini’s dominance in the importation and retail of pharmaceutical and personal care product sales in Trinidad and Tobago.
The Agostini’s notice said the transaction is scheduled to close by April 30, 2021, and it had received the approval of the T&T Fair Trading Commission (TTFTC).
Smith Robertson is the country’s largest wholesale distributor of pharmaceutical and personal care items, according to its website. SuperPharm, with nine outlets, is the largest pharmacy chain in T&T, retailing both pharmaceutical and convenience items. Both Smith Robertson, which was established in 1894, and SuperPharm are 100 per cent owned by Agostini’s.
In its 2020 annual report, Agostini’s reported a 4.6 per cent increase in its revenues to $3.43 billion for the 12 months ending September 31, 2020. Agostini’s after-tax profit for 2020 increased by 3.7 per cent to $168.9 million.
The Agostini group’s revenue has almost tripled in the last ten years, increasing from $1.25 billion in 2011 to $3.42 billion in 2020.
Victor E Mouttet became the majority shareholder of Agostini’s Ltd in 2010 by selling 100 per cent of its shares in Smith Robertson. Instead of receiving cash, the Mouttet family received 29,526,008 new Agostini shares as payment. Those shares meant the Mouttet family’s stake in Agostini’s was 50.4 per cent of the multiline company.
In 2016, Agostini’s acquired VEMCO Ltd, the Mouttet-owned company that, among other things, manufactures the Swiss brand of food products. As payment for VEMCO, Agostini’s issued 10,399,530 new shares to the Mouttet family, increasing its stake to 57.77 per cent of the public company.
Oscar Francois was established in 1958 as a small distribution company to supply a range of American, Canadian and European prescription pharmaceuticals to pharmacies in T&T. It expanded into the distribution of personal care products in 1967, the same year that its founder, Oscar H Francois, established another company, personal care product manufacturer Intersol Ltd. Both Oscar Francois and Intersol, described as an associate company, have been acquired by Agostini.
The acquisition of Oscar Francois and Intersol by Agostini’s raised immediate concerns on social media about a possible reduction in competition in imported pharmaceuticals and personal care products on the local market, and potential price increases due to the dominant position of Agostini’s.
The role of TTFTC in approving a transaction was also questioned.
In an unofficial comment pending feedback from key staff and commissioners, a TTFTC official said: “Please note that when it comes to mergers, unless competitors and consumers, as well as research, raise red flags, it is only then that the merger will not be approved.
“Historically, around the world, the vast majority of mergers tend to be approved, with the competition agency informing the merged party that they will be closely monitored going forward.”
The official explained from the responses to the surveys and other feedback from competitors, as well as consumers, “no one voiced any major concerns as they recognised that because of the present economic situation globally, there is the need to merge in order to survive.” The official said the TTFTC would issue an official response on Monday after internal consultations.
The acquisition will also result in Agostini’s representing three of the international companies that have approved Covid-19 vaccines on the market: AstraZeneca, Pfizer and Johnson & Johnson.
Oscar Francois represents, among other international companies, Proctor & Gamble, Church & Dwight, and Janssen and Merck. On Wednesday, the US government announced that Johnson & Johnson would partner with Merck to manufacture the Janssen Covid-19 vaccine. The US Federal Drug Administration approved the Johnson & Johnson vaccine for emergency use on Monday last.
Smith Robertson has partnerships with 28 global pharmaceutical companies, including AstraZeneca, Pfizer, Norvartis, Bayer, Roche and GlaxoSmithKline. AstraZeneca and Pfizer both produce WHO-approved Covid-19 vaccines.
The Sunday Express could not confirm that vaccines are covered by Agostini’s representation of AstraZeneca and Pfizer now and Janssen in the future as Agostini’s chairman, Christian Mouttet, did not respond to WhatsApp messages or answer calls to his mobile phone.
Who owns Agostini’s
The Mouttet family owns a total of 39,925,538 Agostini’s shares, or 57.77 per cent of the company. According to the company’s 2020 annual report, 33,525,538 Agostini shares are owned through Victor E Mouttet Ltd, 4,800,000 by GNM Properties and 1,600,000 through JMM Properties.
Christian Mouttet is the chairman of the 12-member Agostini’s board while his brother Francois is a director. They are described as connected parties in the company’s 2020 annual report.
The second largest shareholder of Agostini’s is the Ahamad family, the owners of new car importers Southern Sales and Services.
The Ahamad’s own 10,084,712 shares in Agostini’s through two companies, Universal Ltd and Proteus Ltd, which control 6,054,937 and 4,029,775 shares, respectively. The Ahamad family owns 14.59 per cent of the company’s issued share capital.
President of the T&T Chamber of Commerce Reyaz Ahamad, who is an executive director of Southern Sales and Services, is a director on the Agostini’s board and is described as a connected party.
Home Construction Ltd is the sixth largest shareholder of Agostini’s with 1,925,291 shares, accounting for 2.78 per cent of the company.
Amalgamated Securities director John M Aboud, who is a director of Agostini’s, owns 1.72 per cent of Agostini’s through Pelican Investments Ltd, with 1,189,994 shares. Pelican is the ninth largest shareholder of Agostini’s.
As at April 30, 2020, John Aboud owned indirectly 25 per cent of Endeavour ABRA Holdings, which owns 97.32 per cent of publicly listed Endeavour Holdings Ltd. Endeavour is the landlord of four of the nine SuperPharm stores (Price Plaza in Chaguanas, Valsayn, Gulf View and in Westmoorings).
Among them, the ten largest shareholders of Agostini’s own 61,564,309 shares in the company, accounting for 89 per cent of the public company’s issued share capital.
In comments in Agostini’s 2020 annual report, managing director Anthony Agostini said: “The foreign exchange situation in Trinidad and Tobago was again very problematic in 2020, and we were unable to source enough US dollars to meet our foreign purchases.
“We undertook a comprehensive “exercise”, which resulted in the culling of about 30 per cent of the line items in our FMCG businesses.
“This ensured that we were able to steer our US dollars towards our more strategic and faster-moving and more profitable products.
“We also had to buy more alternative currencies than in previous years, mainly Euros, which when converted would have had the effect of increasing our foreign exchange cost by five to seven per cent.”