Indian pharma company Cipla has made a $220m offer to take a majority stake in its South African distributor Cipla Medpro.
Cipla has indicated it wants to take a 51 per cent stake in Cipla Medpro, but stressed that the discussions are in the early stages and may not lead to a deal. If it goes through the deal would be the first overseas acquisition for the Indian drugmaker.
Cipla Medpro says it is the third-biggest pharma manufacturer in South Africa with revenues of R1.1bn ($120m) in the first six months of 2012, a rise of 28 per cent year-on-year which the company said was pegged back by delays in getting registration of new generic drugs.
Despite the fast growth, the South African company has been destabilised of late by the departure last month of CEO Jerome Smith, who founded the company, ahead of a disciplinary hearing at which he was due to respond to “serious allegations” which have never been disclosed publicly.
The Indian company has a 20-year-long marketing and distribution deal with Cipla Medpro but does not currently own any equity in the company, which currently has a market share by value of around 5 per cent in South Africa.
Cipla Medpro has been trying to expand its product portfolio in over-the-counter and cancer medicines in South Africa, which is the largest pharma market in Africa and estimated to reach a value of $3.6bn this year, according to data from Business Monitor International.
Cipla names new CEO
Meanwhile, Cipla has just appointed Subhanu Saxena as its new chief executive effective February 1 2013. Saxena will join the company from Novartis Pharma AG, where he was in charge of global product strategy and commercialisation.