Indian drug giant Cipla is looking to snap up a majority share of Cipla Medpro, offering $220 million (or $0.95 a share) for a 51% stake in the South African firm.
The Mumbai-based company said talks are still in the preliminary stages, and that “at this stage, there is no certainty that these discussions will lead to a firm offer being made or a transaction being consummated”.
The discussions, it stressed, remain subject to various conditions, including the completion of due diligence and board/regulatory approvals.
Cipla does not currently hold any equity in Cipla Medpro, though there is a supply agreement between the two firms in place in South Africa and neighbouring countries.
Explaining its interest in acquiring a portion of the group, Cipla noted that Cipla Medpro is one of South Africa’s fastest growing pharmaceutical companies with particular strengths in the cardiovascular, antiretroviral, respiratory and neuropsychiatric fields.
It also signifies the companies intention to gain a stronger foothold in the emerging South African market.
“This development is a positive for Cipla as it now gets a good access to the branded and OTC (over-the-counter) space apart from the tender-related business in Africa,” said Fortune Equity Brokers analyst Hitesh Mahida, according to media reports.
