Reuters
Indian drugmaker Cipla planned to offer $215 million (R1.9 billion) for a 51 percent stake in South Africa’s Cipla Medpro, it emerged yesterday, to strengthen its presence in Africa’s market for generic versions of branded drugs.
Cipla, which supplies Cipla Medpro’s drugs but does not own a stake in the firm, sells generics to treat HIV/Aids and cancer in emerging markets. The proposal shows the rise of “south-south” deals, where Indian and Chinese firms buy into Africa, lured by its rising incomes and population.
Cipla planned to offer R8.55 a share for the stake in Cipla Medpro, the firm said. Cipla Medpro would express a view to shareholders on the Indian firm’s proposal when it had received a firm offer.
The proposed offer values the company at R3.8bn. Cipla would fund the deal through its own cash. By revenue, Cipla Medpro has a compound annual growth rate of 20 percent. Its shares rose 7.9 percent to R8.30 on the JSE yesterday.
The supply deal between the two firms was spearheaded by Cipla Medpro founder and former boss Jerome Smith, who quit last month following charges of gross misconduct for approving bonuses for himself without board approval.
There had been speculation Smith’s departure could affect Cipla Medpro’s relationship with the Indian firm.