New Delhi, Mar 1 (IANS) Indian pharma company Cipla has offered to buy out South African partner Cipla Medpro, paying around $512 million to expand into Africa where the demand for inexpensive drugs is growing exponentially.
Johannesburg-listed Medpro is South Africa's third largest generic drug firm. The board of Cipla Medpro has endorsed the deal and asked shareholders to vote for the cash offer.
The proposed acquisition will be made either directly by Cipla or by a subsidiary nominated by it and will be funded largely through internal accruals and will consider other alternatives, if required, Cipla said in a release.
"This investment is aimed at further strengthening our commitment to South Africa and the broader African continent," said Cipla Chairman Yusuf Hamied.
Patients and the healthcare landscape in the continent will benefit both from Cipla's 77-plus years of experience across products, technologies and dosage forms, Hamied said.
The acquisition when completed would be the largest ever by an Indian company in South Africa.
"South Africa is an attractive emerging market with strong projected growth for generic drugs of approximately 14 percent per year for the next several years. This investment is aligned with Cipla's strategy to ascend the value-chain by managing a front-end sales force in a market outside India," said Cipla CEO Subhanu Saxena.
"Cipla and Medpro have enjoyed a long-standing symbiotic relationship spanning two decades. The deal enables Cipla to strengthen Medpro's position in the South African pharmaceutical market, support the optimisation of Medpro's manufacturing capability and support Medpro's expansion into collaboratively identified African markets."
In November, the Mumbai-based $1.4 billion turnover Cipla had first offered $215 million for 51 percent of the company.