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Dr Reddy's buys German co Betapharm for Rs 2,250 cr — Biggest overseas acquisition by an Indian pharma co

Our Bureau

Hyderabad , Feb. 16

DR REDDY'S Laboratories has acquired the fourth-largest German generic drug maker Betapharm Arzneimittel GmbH for euro 480 million (approximately Rs 2,550 crore).

The Hyderabad-based company has signed a definitive agreement with 3i, the private equity house that controls Betapharm, on Thursday to acquire 100 per cent equity of the German drug major.

This is considered to be one of the biggest overseas acquisitions by an Indian pharmaceutical company. The transaction would be funded using a combination of the company's internal cash reserves and committed credit facilities. Other financial terms and conditions of the transaction were, however, not disclosed.

In a press release here on Thursday, Dr Reddy's said the transaction, subject to customary closing conditions, is expected to close in the first week of March 2006.

This is the company's second acquisition in Europe. In 2002, it acquired the UK-based BMS Laboratories and its wholly-owned subsidiary, Aurigene Discovery Technologies, for around $12 million. In November 2005, Dr Reddy's acquired Roche's APIs business, in Cuernavaca, Mexico, in a $59-million deal.

Betapharm commands 3.5 per cent share of the euro 27-billion German pharmaceutical market. It had reported total sales of euro 164 million last year. It markets high-quality generic drugs with focus on long-term therapy products with high prescription rates. It is the fastest growing generic company over the past five years in Germany's top-10 with a strong track record of successful product launches.

Commenting on the acquisition, Dr K. Anji Reddy, Chairman, Dr Reddy's Laboratories, said, "We see our investment in Betapharm as a key strategic initiative towards becoming a mid-sized global pharmaceutical company with strong presence in all key pharmaceutical markets. Betapharm has created a strong growth platform and is well positioned for the future and we are looking forward to partner with them in building a strategic presence in Europe."

On the strategic initiative, the company's Vice-Chairman and CEO, Mr G.V. Prasad, said, "Betapharm with its differentiated business model has all the key elements for achieving success in the fast-growing generics market in Germany. We strongly believe that this strategic investment will generate substantial opportunities for long-term value creation for both the companies. The combination of these two companies will enable Betapharm to continue to expand its growth trajectory and at the same time provide a strong foundation to leverage Dr Reddy's global product development and marketing infrastructure to build a significant generics business in Europe in the long term."

The company's stock recorded the year's highest price on both the BSE and NSE. It closed at Rs 1,281.95 on the BSE and at Rs 1,280.65 on the NSE with over four-lakh shares changing hands on the BSE and nearly 11-lakh shares trading on the NSE.

The scrip gained Rs 109.90 on the BSE and Rs 108.75 on the NSE.

Related Stories:
Ranbaxy bids to acquire German co
Dr Reddy's Q3 sales, net up on API, branded dosage biz growth
Dr Reddy's to buy Roche's Mexico unit for $59 m

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