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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