Ranbaxy passes, Dr Reddy’s in race for Adcock Ingram
Dr Reddy’s Laboratories emerges as a possible suitor for the over-the-counter drug business of South Africa’s Adcock Ingram as Ranbaxy is learnt to pulled out of the race, reports Suprotip Ghosh.business Updated: Apr 30, 2007 20:32 IST
Dr Reddy’s Laboratories has emerged as a possible suitor for the over-the-counter drug business of South Africa’s Adcock Ingram as Ranbaxy Laboratories is learnt to pulled out of the race for what investment bankers peg as a $1.2 billion (Rs 4,941 crore) business.
Investment banking sources confirmed that Ranbaxy had "passed the bid", citing a valuation that might be too high. Adcock Ingram’s business includes a major drug, Panado, used in the treatment of AIDS.
Ranbaxy has a joint venture with Adcock Ingram to exclusively sell and distribute Ranbaxy's range of anti-retroviral products or anti-AIDS drugs in South Africa.
Ranbaxy and Dr Reddy’s, however, refused to confirm or deny the news. "We do not comment on market speculation," Ranbaxy sources said. Dr Reddy’s did not reply despite repeated attempts.
Dr Reddy’s has kept a low profile since its Rs 2,000 crore acquisition of Germany’s second largest generics player betapharm. Ranbaxy, on the other hand, had publicly announced its intention of picking up the $5.6 billion generics business of Merck & Co.
According to analysts, the $1.2 billion business of Adcock Ingram would create a major base for the buyer. Tiger Brands, the owner of Adcock Ingram, is the largest player in the segment in South Africa, and controls a major share of the over-the-counter and consumer drugs segment in the continent.
The decision to sell the over-the-counter business was announced by Ingram on April 20. Investment banking sources said the company could be a lucrative opportunity for Indian players. Over-the-counter drugs can be sold with or without a prescription.
Malvinder Mohan Singh, CEO and MD of Ranbaxy, has come on record saying he was looking for opportunities to acquire companies in India and abroad.
Tiger Brands acquired Adcock Ingram in 1999, as part of a strategy to foray into the over-the-counter drug business.