Tuesday, May 25, 2010

 

Abbott buys Piramal's generics business for billions

After generics maker Ranbaxy was sold by its promoters for $4.6 billion, which was five times its revenues in 2008, another deal at a record-breaking valuation has taken place in the pharma business. US drug maker Abbott has paid $3.7 billion (around Rs 17,000 crore) for Piramal Healthcare's Indian branded generics business, which is a record eight or nine times its sales.

With this deal, Abbott becomes the top pharma company in India with a market share of about 7 per cent. It also gets 350 brands, and one manufacturing facility in Himachal Pradesh, and a little over 5,000 employees, from Piramal Healthcare. Indian generics companies have been under pressure from India's adoption of the new drug patent regime since 2005. Other international pharma companies like Sanofi-Aventis, Pfizer, and GlaxoSmithKline are looking to acquire Indian branded generics firms to raise their market share. The Indian pharmaceutical sector is growing at a rate of 13%-15% compared with 2-3% in the West.

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