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Cipla ups offer for SA's Cipla Medpro

Feb 28 2013 08:55
Reuters

Mumbai - Indian drugmaker Cipla on Thursday sweetened its offer by 17% to take over South Africa's third-largest drugmaker, Cipla Medpro South Africa [JSE:CMP], 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 $512m, or R10 a share, to acquire Cipla Medpro and then delist the South African drugmaker.

The Indian company in November 2012 offered to buy 51% of Cipla Medpro at R8.55 a share. After Cipla's initial offer, the South African company won a R1.4bn government drug contract, leading analysts to revalue the African firm higher.

"With a 100% 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 Chairperson 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% at 367.40 rupees by 04:26 GMT while the Mumbai market was up 0.53%.  

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