The Hindu Business Line : Ranbaxy concludes Be-Tabs buyout in S. Africa

New Delhi May 8 Ranbaxy Laboratories announced on Tuesday the completion of its South African acquisition of Be-Tabs Pharmaceuticals with approval from that country's Competition Commission.

Valued at Rs 50 crore ($70 million), the acquisition will make the Gurgaon-based company the fifth-largest generic pharma company in South Africa, according to a statement from Ranbaxy. As part of the acquisition, which the company first announced in early December 2006, Ranbaxy has concluded a Black Empowerment transaction with a Community Investment Holding group company.

Be-Tabs gives Ranbaxy, which has had a presence in South Africa for more than a decade, local manufacturing capability. According to the President of its global pharmaceutical division, Mr Peter Burema, who signed the deal on behalf of Ranbaxy on May 4, "The acquisition of Be-Tabs will ensure that Ranbaxy develops deeper roots in South Africa and with a strong local flavour."

"The company's decision to manufacture locally will not only help to provide quality medicine at an affordable price to the Southern African market, but will also mean a further investment of approximately Rs 100 million in the local economy," said Mr Desmond Brothers, CEO, Ranbaxy South Africa, in a statement.

The company, in its announcement to the BSE on the approval, said this was in line with the company's aggressive international expansion strategy. Ranbaxy also has major upgradation plans for Be-Tabs, to bring its factories in line with new standards. The facility is to substantially strengthen the basket of products that Ranbaxy hopes to bring to the market — especially in the acute and over-the-counter areas.

The acquisition is expected to boost earnings by more than double, says the company. According to Ranbaxy, Be-Tabs is to remain an independent trading entity and will form one of the three companies within the Ranbaxy SA Group — the other two being Sonke Pharmaceuticals and Ranbaxy (South Africa).

Be-Tabs Pharmaceuticals is the largest manufacturer of Penicillin formulations in South Africa and markets and manufactures a portfolio of ethical and over-the-counter solid-oral and liquid formulations in South Africa. It has sales of approximately $30 million.

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