AstraZeneca weighs options for Indian unit

Published Mar 6, 2012

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AstraZeneca Plc is considering options for its Indian unit, including buying the remaining 10 percent of AstraZeneca Pharma India Ltd in order to secure full ownership in a key emerging market.

International companies have until mid-2013 under Indian regulatory rules to either reduce their stake below 75 percent or delist their Indian operations, after buying out minority shareholders.

“We continue to consider two options, reducing our shareholding to the new statutory maximum of 75 percent and delisting,” said a company spokeswoman in London.

An earlier report in the Economic Times newspaper, citing two people familiar with the matter, that AstraZeneca was planning to delist and was in talks with top investment banks lifted shares in the Indian unit more than 5 percent.

With a market value of around $1.1 billion, buying out the rest of AstraZeneca Pharma India would be well within AstraZeneca's reach. The company had cash reserves of $7.6 billion at the end of December.

Taking 100 percent control would also signal AstraZeneca's commitment to emerging markets, which it sees as a key growth area at a time when many of its top drugs face loss of patent protection, pressuring its sales line for years to come.

Securing a full buyout, however, may not be straightforward. AstraZeneca previously tried in 2010 to delist the Indian business, only to find that shareholders failed to approve the move in a postal ballot. - Reuters

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