Aspen Pharmacare, Africa’s largest drug manufacturer, has agreed to sell its infant formula business to French dairy group Lactalis International for €739.8m (about R12.8bn) and says it will consider further disposals.

The deal will enable the drugmaker’s Asia Pacific, Latin America and Sub-Saharan Africa divisions to focus on the main pharmaceutical operations, the South African company said on Thursday.

The unit, known as global nutritionals, contributed R3.09bn to revenue and R512m to profit in the year to end-June.

Aspen, which sells products such as hormones, anaesthetics and antiretroviral medicines in more than 150 countries, said in January it was weighing options for the infant-formula unit following an unsolicited approach last year.

Aspen said on Thursday that it would use about €62m of the proceeds of the sale to buy out its joint venture partners in New Zealand and China. The rest will be used to reduce gearing.

The deal is subject to the regulatory approval, including from the Reserve Bank.

The company has been using the business to drive a push into China, where it gained approval to sell its Alula formula products earlier this year.

Full-year earnings per share excluding one-time items rose 10% to R16.05 rand per share, Aspen said in the same statement.

Aspen, whose international operations make it very sensitive to currency movements, said a stronger rand took the shine off its financial performance, particularly in the second half of its financial year.

Rand-reported second-half revenue fell R1.3bn.

Group revenue was up 3% to R42.6bn in the year to end-June, and at constant currency rates it rose 5%.

The company declared a dividend of R3.15 per share.

Aspen’s share price was down 6.79% to R254 in early trade on the JSE on Thursday, valuing the company at R116bn.