Grifols Ends Acquisition Talks with Brookfield, Citing Underestimated Value
Grifols, S.A. announced on Wednesday its decision to terminate discussions with Brookfield Capital Partners (UK) Limited regarding a potential acquisition. This move followed the company’s previous statement on November 19th, where they rejected Brookfield’s indicative offer to acquire Grifols. Brookfield had offered 6.45 billion euros ($6.81 billion) or 10.50 euros per Class A share.
The termination seemingly stems from divergent perspectives on valuing the pharmaceutical company. According to Grifols, the offer lacked sufficient consideration for their growth potential and long-term prospects.
The Grifols board acknowledged strong financial performance in their decision.
For the first nine months of 2024, Grifols reported a 9.1% year-on-year increase in revenue at constant currency, attributing the progress to gains across all business units. The company further strengthened their financial stability by reducing debt after selling a 20% stake in Shanghai RAAS for 1.6 billion euros, which contributed to a 12-month adjusted EBITDA amounting to 1.7 billion euros.
During due diligence, Brookfield had full access to Grifols’ data and management. However, Grifols determined that the offer did not reflect the true value of the company.
Brookfield initially stated intentions to secure 9.5 billion euros ($10.6 billion) in debt financing for the possible acquisition. The endeavor would have involved acquiring shares from Grifols of the share previously listed on Spanish stock exchanges and NASDAQ.
The decision comes amidst investigations into allegations put forth by **Gotham City Research, General Industrial Partners, and several of its directors.
The Spanish National Court accepted a complaint from the Anti-Corruption Prosecutor’s Office to investigate these parties for allegedly disseminating biased and misleading information regarding Grifols to induce investors to sell shares. Grifols is listed on the Spanish stock exchange and part of the IBEX.
Financial Performance Explained
Grifols’ recent rejection of the Brookfield offer followed a period marked by
The Spanish court’s acceptance of the complaint alluded to concerns around deliberate manipulation of financial information. A Gotham City Research report alleged that Grifols engaged in accounting practices aimed at artificially reducing its financial leverage.
The accusation centered on Grifols inconclusive profits of satellite companies in their financial reports while exlcuding thetis. Grifols strongly refutes these claims.
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Looking Ahead
As the situation with the failed acquisition passes, Grifols shares declined 12.9% to 7.03 during pre-market trading on Friday.
What factors contributed to Grifols’ decision to walk away from the acquisition deal with Brookfield Capital Partners?
## Grifols Walks Away from Brookfield Deal, Citing Undervalued Potential
**Host:** Joining us today is [Guest Name], a financial analyst specializing in the pharmaceutical sector. Grifols, the Barcelona-based pharmaceutical giant, has just announced the termination of acquisition talks with Brookfield Capital Partners. [Guest Name], what are your thoughts on this development?
**Guest:** Well, this isn’t entirely unexpected. While Brookfield’s initial offer of €6.45 billion, or €10.50 per share [[1](https://www.grifols.com/en/view-news/-/news/grifols-board-of-directors-announces-termination-of-acquisition-discussions-with-brookfield)], seemed substantial, Grifols has been vocal about its belief that the offer undervalued its growth prospects.
**Host:** Grifols did mention strong financial performance as a contributing factor in their decision.
**Guest:** Absolutely. Grifols has been reporting impressive growth, with a 9.1% year-on-year revenue increase for the first nine months of [2024] [[1](https://www.grifols.com/en/view-news/-/news/grifols-board-of-directors-announces-termination-of-acquisition-discussions-with-brookfield)].
They’ve also been actively managing their debt by strategically selling assets, like the 20% stake in Shanghai RAAS for €1.6 billion [[1](https://www.grifols.com/en/view-news/-/news/grifols-board-of-directors-announces-termination-of-acquisition-discussions-with-brookfield)].
This financial solidity likely gave them the confidence to walk away from a deal they felt didn’t reflect their true value.
**Host:** Do you think this signals a change in the acquisition landscape for pharmaceutical companies?
**Guest:** It’s certainly a reminder that acquisition targets are becoming more discerning. Companies like Grifols are realizing their worth and aren’t afraid to hold out for offers that reflect their future potential.
It’ll be interesting to see how this unfolds, both for Grifols and for other pharmaceutical companies considering potential acquisitions.
**Host:** Thank you for your insights, [Guest Name]. This is certainly a story we’ll be following closely.