After considerable media speculation and market rumours, Dr Reddy's has beaten Ranbaxy in the race to acquire German generic drug company Betapharm. Dr. Reddy's announced today that it has signed a definitive agreement with private equity firm 3i to acquire the whole of Betapharm for €480 million in cash.
Interestingly, Ranbaxy had issued a statement to the exchanges yesterday that it has submitted a bid to acquire a German pharma company. There was market speculation all through last week that Ranbaxy had increased its bid for Betapharma to €500 million after Dr Reddy submitted its bid at €450 million.
Located in Augsburg, Germany, Betapharm currently employs about 370 people including a sales force of about 250 with gross turnover of €164 million in 2005. Betapharm's current product portfolio comprises about 145 marketed products.
Betapharm is the fourth-largest generics company in Germany with a market share of around 3.5 per cent. The company markets high-quality generic drugs with focus on long-term therapy products with high prescription rates. Betapharm is the fastest growing generics company over the past 5 years in Germany with a strong track record of successful product launches.
3i, one of the largest private equity firms in Europe, supported a €300 million management buyout of Betapharm in 2004. 3i has been trying to sell its stake for the last few months and had invited bids from potential buyers. The bids were closed by the end of January.
The acquisition would help Dr Reddy's to expand its operations in Europe. Germany is one of the fastest growing generics market in Europe and Dr. Reddy's growing product pipeline would come in handy to improve market share. The acquisition would add considerable marketing abilities to the European operations of Dr. Reddy's.
Dr Reddy's is trading at Rs1,227.15 (up 4.71 per cent) at 10.20 AM on the NSE today. Ranbaxy is trading at Rs438.35 (down 2.09 per cent).
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Reddy's, Ranbaxy lead race to acquire 3I's stake in Betapharm