GOOD READS

Mylan pays $1.6bn for Strides arm

Mumbai, March 1: US-based Mylan Inc is buying the specialties subsidiary of Strides Arcolab for $1.6 billion (Rs 9,000 crore) ' the deal is the third largest in Indian pharmaceuticals and shows the growing interest of drug multinationals in local companies that have the strength to penetrate regulated markets such as the US.

Mylan has pipped giants such as Pfizer Inc, Novartis AG and other multinationals to Agila Specialties Pvt Limited, the subsidiary of Bangalore-based Strides.

They were attracted by the huge potential of Agila's injectable business, where margins are high.

Only Japan's Daiichi Sankyo and US's Abbott have paid more than Mylan for an Indian drug company.

Daiichi bought a large stake in Ranbaxy Laboratories for about $5.45 billion in 2008, while Abbott acquired the formulation business of Piramal Healthcare (now Piramal Enterprises) in 2010 for $3.72 billion.

The deal, announced on Thursday, includes Agila as well as its overseas specialties subsidiary based in Singapore.

Agila recorded sales of $255 million for the year ended December 31, 2012.

"The acquisition of Agila will create a global injectables leader, significantly expanding and strengthening Mylan's global injectables platform and providing Mylan entry into new high-growth geographic markets," the company said in a statement.

Under the terms of the agreement, Strides and its subsidiary will receive an aggregate sum of $1.6 billion in cash on closing and a potential additional consideration of up to $250 million, subject to the satisfaction of certain conditions by Strides.

Strides said the funds would be used to pay off debts, and it would give a pre-tax return of $700-800 million to shareholders.

The company added that it would continue to operate and develop its pharmaceutical business in India and Africa; it would also focus on developing a fully integrated biotech business, which will be fully funded after the Mylan transaction.

Agila is into injectibles and focused on key domains, including oncolytics (anti-cancer), penicillin, cephalosporins and ophthalmics in India and overseas.

Agila will bring Mylan a broad product portfolio of more than 300 filings approved globally and marketed through a network covering 70 countries, including 61 abbreviated new drug applications approved by the US Food and Drug Administration. It operates from nine global manufacturing facilities.

Mylan, which is the third largest generic pharmaceutical company, has huge expectations from the deal. Heather Bresch, CEO of the company, said the acquisition would form a major step in realising its goal of becoming among the top three in the global injectables market.

"The addition of Agila to Mylan's existing injectables platform will immediately create a new, powerful global leader in this fast-growing, attractive market segment. Importantly, Agila will bring Mylan one of the most state-of-the-art, high-quality injectables manufacturing platforms in the industry,'' Bresch added.

Strides Arcolab executive vice chairman and group CEO Arun Kumar said: "We believe Agila, its partners, customers and employees across all of its markets will benefit significantly from Mylan's global reach and strong position in the global generic and specialty pharmaceutical sector."

The transaction is subject to customary conditions, including the receipt of required regulatory approvals.

Jefferies International Ltd is acting as a sole financial adviser to Strides Arcolab.

However, the Strides stock ended in the negative territory on the stock exchanges today.

On the Bombay Stock Exchange, the share finished with losses of 5.10 per cent to close at Rs 870.95. Market circles said the negative reaction came as the consideration paid came below expectations of around $2 billion.

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
1
2
3
4
5
6
7
8
9
10

Latest News

  • BSE Sensex hits record high for third straight day

    The BSE Sensex and Nifty hit record highs for a third session in a row as infrastructure companies such as Larsen & Toubro extended recent gains while lenders including Yes Bank advanced on hopes the worst ... …

  • Sensex, Nifty at new highs; capital goods sector gains

    Mumbai, April 23 (IANS) A benchmark index of Indian equities markets touched a record high of 22,912.52 points Wednesday for the third straight day, surpassing the 22,853.03 points it touched Tuesday. ... …

  • Rupee falls for third day; foreign fund inflows key

    The rupee weakened for a third consecutive session on Wednesday, falling below the 61 to the dollar mark for the first time in more than a month, hurt by good demand for the greenback from importers and by continued weakness in Asian currencies. Most emerging Asian currencies fell as the Chinese yuan extended its recent decline to a 16-month low, while the Indonesian rupiah touched its weakest level in more than seven weeks due to increasing month-end dollar demand. It is likely revolve …

  • Procter & Gamble quarterly profit rises on home care sales

    Procter & Gamble Co , the world's largest household products maker, reported a higher quarterly profit on Wednesday, helped by an increase in sales of its home care products. Sales were unchanged at $20.6 ... …

  • HC pulls up Delhi chief secretary over water-logging

    New Delhi, April 23 (IANS) The Delhi High Court Wednesday pulled up the city chief secretary over water logging in the capital during the monsoon. A division bench of Chief Justice G. Rohini and Justice Pradeep Nandrajog slammed the city government, saying nothing was happening in the city as per the master plan. The court had summoned the chief secretary after the authorities failed to submit a report on short and long-term measures to tackle water-logging in the city. "We are living in an …

IN-DEPTH ANALYSIS & INTERVIEWS

  • This might well be India’s biggest Ponzi scam

    It was just too good to be true. Ashok Khital, 45, displays every symptom of a man who knows he's been conned. …

  • India's star studded football league

    High and mighty including Sachin, Salman & Sun Group buy ISL teams …

  • Leaderspeak with Rajesh Janey

    Rajesh Janey, President - India & SAARC, EMC shares many firsts in his life. …

  • Power Hungry

    Gujarat has power round-the-clock. Most other states do not. Why this will matter in the general elections. …

  • Etcetera

    The most keenly watched contest of the current general election will be the one for the Varanasi parliamentary seat, where the Bharatiya Janata Party's prime ministerial hopeful Narendra Modi squares off ... …

  • Economy vs Democracy

    As the country gets election fever, cash comes out of mattresses and turns into liquor, gifts, and food. But it is not bad for the health of the economy, reports Sarika Malhotra from the trenches. …

  • Bracing for Challenges

    Raghuram Rajan is preparing to deal with concerns that may arise when a new government takes charge. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    16.52-0.33-1.96%
    UNITECH.BO
    14.31-0.27-1.85%
    SUZLON.BO
    120.40+7.00+6.17%
    FRL.BO
    66.05+4.10+6.62%
    MANGCHEM.BO
    54.40+1.65+3.13%
    HCLINFO.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    16.20+2.70+20.00%
    JAGSONPH.BO
    53.50+8.90+19.96%
    RUSHIL.BO
    40.45+6.45+18.97%
    RCIIND.BO
    63.95+8.90+16.17%
    MRPL.BO
    24.00+3.10+14.83%
    NELCAST.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    24.25-6.00-19.83%
    BMAL.BO
    13.26-2.24-14.45%
    ZYLOG.BO
    30.15-4.05-11.84%
    DRDATSONS.BO
    19.55-2.45-11.14%
    MARAL.BO
    121.50-13.50-10.00%
    POKARNA.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.