Financial Daily from THE HINDU group of publications
Sunday, Feb 12, 2006
Financial Daily from THE HINDU group of publications Sunday, Feb 12, 2006 |
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Pharmaceuticals Corporate - Mergers & Acquisitions Cipla to raise Rs 882 cr; acquisitions on its radar P.T. Jyothi Datta
Mumbai , Feb. 11 ACQUISITION is possibly on the radar for the estimated Rs 2,400-crore drug company Cipla. Cipla has received an in-principle approval from its board of directors to raise about $200 million (an estimated Rs 882 crore) for capacity expansion and possible acquisition, the company's Joint Managing Director, Mr Amar Lulla, told Business Line. But plans on how the money would be raised, in the domestic market or overseas, would be firmed up depending on the market environment, he added. He admitted that acquisition is in Cipla's scheme of things, "but not merely for increasing topline." Cipla's acquisition targets will be product or technology-related, he said. The enabling resolution to raise money received the green signal at Cipla's board meeting on Saturday. The board also approved the issue of bonus shares, three equity shares for every two held, said a senior company official. FII limit: The limit of investment by the foreign institutional investor has been raised from the present 24 per cent to 40 per cent, the official added. Acquisition has been the buzz around Indian drug companies for the last 12 months or more. Watching the spate of acquisitions by drug companies, pharma analysts are not unanimous on life beyond acquisition for a pharma company. Acquiring a company as large as itself will only hurt the drug company, as it will take time to integrate and recover the costs, said one analyst. But other analysts do acknowledge the need for size, especially when they have to compete internationally with generic giants such as Israeli company Teva and Novartis' generic unit, Sandoz.
Related Stories: More Stories on : Pharmaceuticals | Mergers & Acquisitions | Cipla Ltd
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