Financial Daily from THE HINDU group of publications
Tuesday, Sep 27, 2005
Financial Daily from THE HINDU group of publications Tuesday, Sep 27, 2005 |
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Pharmaceuticals Corporate - Mergers & Acquisitions Enaleni move to buy Cipla Medpro — Drug supply to South Africa, its neighbours will not be hit: Cipla P.T. Jyothi Datta
Mumbai , Sept. 26 CIPLA'S supply of drugs to South Africa and its neighbouring regions will not be derailed by South African drug company Enaleni Pharmaceuticals' decision to buy Cipla Medpro for 1.2 billion rand (Rs 825 crore). Cipla does not have an equity participation in Cipla Medpro; it is only a marketing alliance for the region, a top official with Cipla told Business Line. Cipla has an existing 20-year distribution agreement with Cipla Medpro and this will now be shifted to the new company, he said. The agreement had been inked more than six years ago, the official said, adding that it was difficult to put a figure to the size of the market, as it was a constantly developing segment. According to agency reports from Johannesburg, Enaleni Pharmaceuticals had agreed to buy Cipla Medpro and the group will pay 990 million rand in cash for Cipla plus 110 million rand through an issue of shares, besides an extra 100 million rand cash, depending on profitability, the report said. Cipla Medpro is the third biggest generic drugmaker in South Africa, and the use of Cipla's name by the company was because its drugs were part of the AIDS campaign, the official said. With support from Mumbai-based Cipla, the alliance had in the past spearheaded the crusade for affordable anti-AIDS drugs in the region and other parts of the world. Overseas business accounts for 45 per cent of Cipla's turnover. And Africa accounts for about 26 per cent of Cipla's Rs 1,050 crore export for the year up to March 2005. Lupin-Aspen tie-up Meanwhile, there was more activity in the South African market from another Mumbai-based drug maker, Lupin Ltd. The company has inked an alliance with Africa's generic drugs maker Aspen Pharmacare for the manufacture and marketing of tuberculosis (TB) drugs in South Africa. Lupin expects milestone payments of about $2 million, besides profit sharing between the two companies, a Lupin statement said. The Indian TB-medicines maker wound up its 60 per cent subsidiary in South Africa last year. The subsidiary, Lupin Laboratories South Africa (Pty) Ltd, was essentially a marketing outfit. Industry observers said Lupin's decision to shut shop in South Africa came after its joint venture partner faced financial problems.
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