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Cipla to acquire majority stake in UAE-based pharma manufacturer for $21M

By Lohit Jagwani

  • 30 Jun 2014
Cipla to acquire majority stake in UAE-based pharma manufacturer for $21M

Mumbai-based drugmaker Cipla Ltd is acquiring 51 per cent stake in a UAE-based pharmaceutical company which has manufacturing and distribution business in Yemen for $21 million.

“Given the recent preference to local manufacturing, this secures the company’s presence in a fast growing market,” the company said in a stock exchange announcement.

At present Cipla has over 200 products in Yemen market. The company will pay $21 million for this transaction with additional considerations which would be paid over three years on achievement of milestones.

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Cipla has been aggressively acquiring businesses especially in overseas markets. This is the company’s second acquisition in June. Earlier this month, the company acquired 60 per cent stake in a Sri Lankan company for $14 million.

In 2013, the company acquired its distribution partner in South Africa - Cipla Medpro South Africa - Ltd for around $512 million. This was company’s first acquisition in three years. In 2010, the company acquired stake in Meditab Specialities Pvt Ltd, Mab Pharm and a drug formulation facility in Sikkim.

The firm is also backing start-ups and mid-capital companies through its investment arm Cipla New Venture (CNV). Earlier last month, CNV invested $1.5 million in US-based drug development company Chase Pharmaceuticals Inc to pick up 14.6 per cent.

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The development comes in the wake of Indian pharmaceutical market seeing significant consolidation and M&A activity. Earlier this year, Sun Pharma announced that it is acquiring Ranbaxy in a $4 billion deal. Ahmedabad-based Torrent Pharma has just completed a previously announced deal to acquire domestic formulation business of Elder Pharma for Rs 2,004 crore.

(Edited by Joby Puthuparampil Johnson)

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