Amersham pays pounds 55m for link with Sumitomo

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AMERSHAM International, the health sciences group, is paying 8.52bn yen ( pounds 55m) for a 20 per cent stake in Nihon Medi & Physics, a Japanese radio-pharmaceutical manufacturer owned by the Sumitomo group, writes Gail Counsell.

The purchase is intended to lead to a full joint venture in the Japanese market between Sumitomo and Amersham within a few years.

As part of the deal, Amersham has the right to buy a further 30 per cent of NMP within the next two to five years. At that point Amersham would fully integrate its Japanese business with that of NMP.

NMP and Amersham each have about 16 per cent of the world pounds 700m-a-year nuclear medicine market. Three other groups share the bulk of the remaining market.

But Amersham is under-represented in Japan, with only 8 per cent of the market. The joint venture would take about 60 per cent of the Japanese market.

Bill Castell, Amersham's chief executive, said: 'We wanted to be the market leader in Japan, but unless we really had to we didn't want to waste our management time and money duplicating existing resources.'

The deal will give Amersham a manufacturing presence, vital because of the increasingly short life- span of the radioactive isotopes used in its products.

It also plans to collaborate with NMP in joint research and development, where its Japanese partner boasts strengths in short-lived isotopes and new tagging agents.

The deal will be funded by yen borrowings. Amersham said the final price for the additional stake had still to be negotiated, but would not exceed Y9.78bn.

The deal was seen as a good one for Amersham and the shares rose 15p to 941p.