• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

New Delhi, April 19 In one of the biggest stake sale in the Indian pharmaceutical sector, home-grown drug maker Dabur Pharma said on Saturday that it would sell 73.27 per cent stake to Fresenius Kabi (Singapore) Pte Ltd for an undisclosed amount.

The Singapore firm would purchase the stake at Rs 76.50 an equity share from the promoters and certain other shareholders of the company. Dabur Pharma shares had closed at Rs 69.15 on Thursday. At present, Dabur Group’s promoters - the Burman family - hold 65 per cent stake in the pharma company.

Though the deal has not caught many analyst by surprise given that Dabur has a niche presence in the anti-cancer drug segment, for the Burmans the sell-off is in line with their strategy to focus on FMCG products. Last year, the Delhi-based company had sold its non-oncology formulations business, mostly comprising cardiac and anti-diabetes drugs, to Ahmedabad-based Alembic for Rs 159 crore.

In 2003, the company had hived off its pharmaceutical division from the FMCG business.

“This is not a surprise deal at all because most Indian pharma companies are in the generics space which is like a commodity business. Consolidation is a way of life in this segment not only in India but also in other markets. For example in 2006, Mylan had acquired Matrix Laboratories and going forward I see many such deals happening in the next 5 years,” said Mr Sanjiv Kaul, Managing Director, Chrys Capital Investment Advisors.

Fresenius Kabi Pte is a unit of Germany-based healthcare firm Fresenius SE, which makes anti-cancer drugs. Dabur’s strong pipeline of oncology drugs synergises well with the German parent company.

The Indian pharma company had recently launched its rectum cancer injection Irinotecan in the US - its fourth product in the North American market.

Dabur also has an agreement with Thailand’s Government Pharmaceutical Organization to supply a generic version of an anti-cancer product, Docetaxel.

Anti-cancer drugs worth $10 billion is set to go off patent in the next few years and with only a few generic players in the global market, the acquisition makes it a good buy for Fresenius. Company officials were not available for comments.

They are expected to spell out the details of the deal on Monday.

However, in a filing to the BSE, Dabur Pharma said “the acquisition would be subject to the fulfilment of certain conditions precedent including receipt of necessary regulatory approvals and compliance by Fresenius with public offer requirement under the SEBI regulations.”

For the quarter ended December 31, 2007, Dabur’s net sales had dropped to Rs 65 crore from Rs 76.62 crore in the year-ago period. Net profit at Rs 8.26 crore improved marginally from Rs 8.9 crore during the same period.

Fresenius Kabi recorded sales of euro2 billion and an operating income of euro332 million in 2007.

Analysts said that with a number of merger deals in the offing including that of Ranbaxy and Orchid Chemicals, this could be beginning of the consolidation in the diversified Rs 32,000-crore Indian pharmaceutical market with more than 20,000 companies.

More Stories on : Pharmaceuticals | Mergers & Acquisitions | Foreign Institutional Investors

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
‘No plans to relax ban on non-basmati rice exports’

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line