US-based Abbott Labs has struck a double victory in India. The US-drugmaker that announced a marquee deal to snap Piramal Healthcare’s formulations business for $3.72 billion has disclosed that it has had a successful open offer to acquire shares of Solvay Pharma India.
Abbott has raised its holding in public listed Solvay Pharma India from 68.85% to 88.85% by acquiring shares in the open offer. The offer was made pursuant to a global deal (completed in February 2010) where Abbott acquired Belgium-based Solvay Pharmaceuticals for $6.2 billion.
Abbott had offered to buy Solvay shares at Rs 3,054.73 apiece almost five times its 52 week low price in May’09. At the time, Abbott struck the global deal, Solvay Pharma shares had rocketed to as much as Rs 3,600. It currently trades at Rs 2,500 or about 16% lower than what Abbott had paid to buy the additional shares. The US drugmaker paid Rs 308 crore (~$68 million) to buy more shares.
It is one of the rare cases where an MNC has managed to buy all the shares it proposed to in an open offer. Typically, punters hold MNCs to ransom asking for higher prices. It is one of the reasons why many MNCs who were part of the delisting rush about eight years ago still have minority shareholders looking for an even more attractive exit offer.
In a disclosure ahead of the opening of the offer, Abbott had said it does not have any specific plan to delist Solvay Pharma from the local stock exchange for the next three years.
One of the reasons for acquiring Solvay was that it brought additional presence in key global emerging markets to Abbott. Indeed, with Solvay and Piramal in its pockets, besides its own existing operations in the country, Abbott has become the largest player in Indian pharma sector much ahead of global biggies such as Pfizer among others.