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Cipla plans $512 mln takeover of South Africa's Cipla Medpro

Source : REUTERS
Last Updated: Thu, Feb 28, 2013 05:07 hrs

MUMBAI (Reuters) - Cipla Ltd on Thursday sweetened its offer by 17 percent to take over South Africa's third-largest drugmaker, Cipla Medpro South Africa Ltd , ending the uncertainty of an earlier offer that had been put on hold by the Indian company.

Cipla, India's fifth-largest drugmaker by sales, said it would spend about $512 million, or 10 rand a share, to acquire Cipla Medpro and then delist the South African drugmaker.

The Indian company in November 2012 offered to buy 51 percent of Cipla Medpro at 8.55 rand a share. After Cipla's initial offer, the South African company won a 1.4 billion rand government drug contract, leading analysts to revalue the African firm higher.

"With a 100 percent buy-out plan, Cipla will have good operational synergies in the African market," said Siddhant Khandekar, an analyst at ICICI Direct in Mumbai. "However, it is difficult to predict if the payback would happen quickly."

Cipla Chairman Y. K. Hemied told Reuters earlier this month that the November acquisition had been on hold, but did not give any reason. Cipla is the biggest supplier of drugs to Cipla Medpro.

Shares in Cipla were up 0.8 percent at 367.40 rupees by 0426 GMT while the Mumbai market was up 0.53 percent.

(Reporting by Kaustubh Kulkarni; Editing by Jijo Jacob and Matt Driskill)




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