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The Sanofi group's Aventis Pharma has formalised an agreement to acquire Universal Medicare Private Ltd's branded nutraceuticals business in the country — strengthening Sanofi's presence in the wellness segment.
This would be France-based Sanofi Group's second acquisition in India over two years, the last being in July 2009, when it picked up majority stake in vaccine-maker Shantha Biotec for over Rs 3,700 crore.
The deal to buy Mumbai-based Universal Medicare' s domestic nutraceutical products is expected to close in the last quarter of 2011, subject to certain conditions, a Sanofi note said, without disclosing financial details.
The size of Universal Medicare's business that will be acquired is Rs 110 crore. Reports, unconfirmed by the company, peg the deal at about Rs 500 crore.
The move is in synch with the growth strategy of Sanofi, a majority stakeholder in Aventis Pharma, the company said. About 750 employees from Universal will move into Aventis Pharma, as well, it added.
The acquisition will allow Aventis Pharma and the Sanofi Group to reach out to large sections of India's population through a broad offering of pharmaceuticals, vaccines and now nutraceuticals, said Dr Shailesh Ayyangar, Managing Director – Aventis Pharma Ltd and Sanofi's Vice-President – South Asia.
Universal Medicare's portfolio of over 40 branded formulations includes the cod liver oil capsule Seacod, vitamins, mineral supplements, primarily antioxidants, anti-arthritics, anti-osteoporotics, liver tonics, and other nutrients. Universal will manufacture the products that Aventis Pharma will acquire on mutually agreed terms, the note added.
Wellness opportunity
Sanofi's acquisition of Universal's nutraceuticals business is aligned to its strategy to look at wellness, and not just sickness, said Mr Muralidharan Nair, Partner with Ernst & Young.
In fact, the nutraceuticals segment in the country is estimated at about Rs 5,000 crore, he said, adding that several multinational and domestic companies are looking at the over-the-counter (OTC) products and nutraceuticals/ food-supplements etc, as they look at healthcare and wellness, rather than tackling sickness through medicines.
GlaxoSmithkline, for instance, has a consumer healthcare business in India, and in December last year, Reckitt Benckiser had agreed to buy Paras Pharmaceuticals for over Rs 3,200 crore.
Sanofi's latest deal adds to a steadily increasing list of local drug-makers being bought by multinationals — from the Daiichi-Sankyo acquisition of Ranbaxy to the more recent buy of Piramal Healthcare's domestic formulations business by Abbott. But Sanofi's appetite to grow in the pharmaceutical segment may not yet be satiated, say industry watchers, as the earlier two buys were to source vaccines and nutraceuticals, respectively, experts said.
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