Cipla Ltd has announced an offer to the shareholders of Cipla Medpro South Africa Ltd to acquire 100 per cent of the ordinary share capital of Medpro for ZAR 10.0 per share.
The total consideration payable by Cipla is approximately $512 million (over Rs 2,700 crore) or ZAR 4.5 billion.
The offer will be implemented via a scheme of arrangement and is subject to regulatory and other approvals including approval by Medpro shareholders, Cipla said.
The board of directors of Medpro has unanimously resolved to support and facilitate Cipla’s offer and recommended to Medpro shareholders that they vote in favour of all resolutions required to implement the scheme.
The proposed acquisition will be made either directly by Cipla or by a subsidiary nominated by it and will be funded largely through internal accruals and will consider other alternatives, if required.
Speaking on the offer, Cipla CEO Subhanu Saxena said: “South Africa is an attractive emerging market with a strong projected growth for generic drugs of approximately 14 per cent per year for the next several years. This investment is aligned with Cipla’s strategy to ascend the value chain by managing a front-end sales force in a market outside India. Cipla and Medpro have enjoyed a long-standing symbiotic relationship spanning two decades. The deal enables Cipla to strengthen Medpro’s position in the South African pharmaceutical market, support the optimisation of Medpro’s manufacturing capability and support Medpro’s expansion into collaboratively identified African markets.”
Cipla Chairman Yusuf K. Hamied added: “This investment is aimed at further strengthening our commitment to South Africa and the broader African continent. Patients and the healthcare landscape will benefit both from Cipla’s 77+ years of experience across products, technologies, dosage forms and Cipla’s ethos of striving hard to provide greater access to medicine.”
Morgan Stanley is acting as exclusive financial advisor and Webber Wentzel is acting as legal advisor to Cipla in connection with this transaction.
jyothi.datta@thehindu.o.in