Cipla, through its wholly-owned subsidiary Meditab Holdings Ltd (MHL), has acquired an additional 14.5 per cent stake in Quality Chemical Industries Ltd (QCIL), Uganda, for $15 million, as per a stock market disclosure.
With this, MHL’s holding in QCIL has moved up to 51.05 per cent.
QCIL was formed as a joint venture between Ugandan firm Quality Chemicals Ltd and Cipla in 2005. The idea was to locally manufacture antiretroviral drugs to combat HIV/AIDS and anti-malarial drugs under licence from Cipla.
QCIL has since then attracted two additional investors namely Capitalworks International Partnership Fund and TLG Capital Fund. It is not clear if Cipla has bought out some stake of existing investors or raised its holding by investing afresh.
"Cipla is one of the key players in ARVs (antiretrovirals); it has also recently completed the project on APIs of ARVs in Kurkumbh, Maharashtra. Thus an increased stake in QCIL will enable the company to consolidate its position in the ARV segment, though making not much of the impact on the numbers as such. We maintain our buy with a price target of Rs 504," said Sarabjit Kour Nangra, VP-Research Pharma, at Angel Broking.
This is Cipla's second majority stake buy in Africa after it completed acquisition of South Africa’s Cipla Medpro in July this year.
Prior to that, three years ago, the company acquired stake in Meditab Specialities Pvt Ltd, Mab Pharm and a drug formulation facility in Sikkim.
(Edited by Joby Puthuparampil Johnson)