Indian drug makers Ranbaxy Laboratories, Dr Reddy’s Laboratories (DRL) and Lupin are learnt to be in the fray to acquire 53% stake in Romania’s leading pharmaceutical company Antibiotice. The state-owned company, which is being privatised, is to be auctioned in March with a reserve price of $200 million (Rs 800 crore).
Ranbaxy Laboratories’ CEO & MD Malvinder Singh said: “We cannot comment on acquisition conjectures. However, in the generics pharmaceuticals space, we believe there is more opportunity for acquisitions in the emerging markets because we see more sustainability and earnings growth from this region. We will consider target companies based on the value and the synergies that can be unlocked from such a deal that can ultimately enhance the shareholders’ value.”
A source added that while Ranbaxy Laboratories has established a strong presence in Romania following its acquisition of Terapia in 2006, it made sense for the company to buy attractive assets to pre-empt competition from any Indian company in the lucrative Romanian market.
A senior Lupin official said the company was looking for acquisitions in central Europe. However, the official declined to comment on specific deals. A DRL spokesperson said the company did not respond to market speculation as matter of a policy.
According to agency reports, 53 companies, including five from India, have sent letters to the Romanian government evincing interest in buying Antibiotice. The deadline for depositing guarantee fee to participate in the auction is March 17.
Sources pointed out that more domestic companies could be in the race as Indian companies are aggressively exploring target companies and placing non-binding bids. However, only a few companies may actually put in final bids for the company. Also, given the size and the number of contenders in the fray, it may not be easy for an Indian company to buy Antibiotice.
Antibiotice is a profit-making generic company with nine production lines to manufacture several dosages of formulations. It has a portfolio comprising over 120 medicines across 11 therapeutic segments. The company is the leading producer of anti-infectives and various injectables in Romania with a pipeline of discovery drugs under development.
According to the company’s website, it is one of the leading companies in Romania with a 3.3% market share in the $2-billion domestic market. Romania, now part of the European Union, is a key strategic location for generic companies to expand in Europe because of its low cost.
Source: Economic Times