The Hindu Business Line : Ranbaxy bids for Merck's generic business

Bidding game
The global bidders include Iceland's Actavis Group HF, Israeli company Teva Pharmaceutical Industries Ltd and US-based Mylan Laboratories.
The Indian bidders include Cipla, which is reported to be party of a consortium pitching for it.

New Delhi March 13 Ranbaxy Laboratories put in its bid for Merck's KGaA's generic business, an acquisition that could make India's largest drugmaker the third largest generic player in the world.

Although the company did not share the structure or value of the bid, it maintained that it would not enter into a `rat race' to acquire the German business, and would only consider it at a fair and reasonable value. In a company statement, Mr Malvinder Singh, CEO and Managing Director said, "We are looking to evaluate the asset and are going to be very practical about it."

Recently, Mr Singh had also told Business Line that the entire process could take a good three to four months. Iceland's Actavis Group HF has also expressed its interest, Israeli company Teva Pharmaceutical Industries Ltd and US-based Mylan Laboratories are reportedly vying for the asset.

Ranbaxy is not the only Indian bidder; Cipla is reported to be party of a consortium pitching for it.

Dr Reddy's which was also believed to be in the running has, however, clarified that it will not bid for the asset valued between $5 billion and $6 billion by analysts, a limit that Ranbaxy describes as "factually incorrect and speculative".

Merck's generic sales were at about Rs 10,500 crore (or 1.8 billion) for 2006. Ranbaxy reported sales of Rs 6,022 crore for last year primarily due to the 180-day exclusivity advantage it had on the launch of cholesterol lowering, Simvastatin.

Though its Brazil, Russia, India, China and South Africa (BRICS) markets did really well last quarter, sales in Europe had dropped by 6 per cent. The company had blamed it on stiff competition in the UK market and impact of health care reforms in France and Germany.

Merck's generic business includes its operations in Brazil, Belgium, Italy, the Netherlands, Spain, and UK, and also Alphapharm in Australia, Genpharm in Canada, Merck Dura in Germany, Scandharm in Sweden and Dey in the US. The company had decided to divest the business soon after it bought biotech company Serono for $13.3 billion. Last year, Ranbaxy too also acquired the Romanian company Terapia for about $324 million, and has since made it its hub for Europe.

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