Indian drugs maker Cipla Limited has offered to buy a about a 51 percent stake in South Africa's Cipla Medpro , to strengthen its position in the fast-growing African drugs market.
The Indian firm has offered 8.55 rand per share, Cipla Medpro said in a statement on Wednesday. The price represents an 11 percent premium on Cipla Medpro's closing share price on Tuesday.
Shares of Cipla Medpro, South Africa's No.3 drug maker, surged 8.58 percent to 8.35 rand on the news.
Cipla supplies the bulk of Cipla Medpro's drugs through a longstanding supply agreement. However, the two have never had a capital alliance.
The agreement was spearheaded by Cipla Medpro's founder and former chief executive, Jerome Smith, who quit last month following charges of "gross misconduct" for approving pay rises and bonsues for himself with board approval.
There had been some speculation in the market that Smith's departure could impact Cipla Medpro's relationship with the Indian company.