Adcock Ingram drops plans to acquire Cipla Medpro SA

02 June 2009

South African healthcare group Adcock Ingram Holdings Ltd has abandoned a planned 2.1 billion rand ($260 million) acquisition of Cipla Medpro South Africa Ltd, after Cipla India, its principal supplier, threatened to cancel a supply agreement.

Adcock Ingram had, on 9 April, announced its intention to make an open offer to acquire the entire issued share capital of Cipla Medpro SA (CMSA).

Adcock said it decided to drop the takeover plan after it came to know of an alleged termination right held by Cipla Ltd over its supply pact with CMSA. The generic drugs company hadn't publicly disclosed it, Adcock said in release.

The Johannesburg Stock Exchange is investigating the matter, Adcock added.

Adcock said, in its view, there was now no reasonable prospect of a key suspensive condition to the proposed transaction being fulfilled, and that Adcock was not prepared to waive the suspensive condition in question.

Adcock said it has obtained the consent of South African regulators for the proposed acqusition, but, highlighted concerns over the supply clause to support its decision not to proceed with the acquisition.