New Document top_band
 
Business Standard

Pfizer might be close to buying Strides' unit

Related News

The buzz about acquiring the injectable-drugs business of is getting louder.

Bankers and analysts said a deal between Pfizer and the Bangalore-based company has been sealed. It would involve the multinational drugmaker buying the unit, called , for almost $2 billion (Rs 11,000 crore). Strides’ market capitalisation on Tuesday was Rs 6,586 crore. The deal could be announced over the next couple of weeks, they said.

When asked, a Strides spokesperson said, “We have nothing more to add to our earlier comment that we made to the stock exchanges.” The company, in response to an earlier story, titled ‘Strides set to consider sale of injectable unit’ had said, “The company denies the content of the news item and the news item also carries a clarification from the management 'that the news is speculative'.”

A source close to Pfizer confirmed the company was negotiating with Strides. “We are expecting to hear from them anytime,” the source said.

Despite the denial from Strides, its shares surged to a new high of Rs 1,122 on Tuesday. The stock has risen 64 per cent since June. The rally has given rise to speculation that a former star fund manager and a Mumbai-based billionaire investor have mopped up the shares in sizable quantities. , a Mumbai-based high net worth investor, has raised his stake in the company to almost 3.8 per cent of its equity from about 2.2 per cent earlier this year.

Agila, which grew 39 per cent in the September quarter from the same period a year before, contributed 61 per cent to Strides’ total revenue, said broking firm , in a report after the second quarter results. Agila supplies sterile injectables for cancer treatment to Pfizer. “The deal is certainly expensive for Pfizer but that’s the premium they are paying for a quality business,” said a person familiar with the matter.

Reports suggested private equity firm KKR and Novartis were in the race for Agila but analysts said the deal could have swung in Pfizer’s favour partly because of an earlier business relationship between the two and that the US firm had agreed to pay a premium for the business.

The last big acquisition of a local drug marker was in 2010, when bought out ’s formulation business for $3.7 billion. Abbott paid Piramal about nine times its sales during that year.

Read more on:   
|
|
|
|
|
|

Read More

Telenor's 2008 licence fee may not be adjusted in new payment

Telenor may not be able to avail of the benefit of adjusting Rs 1,658 crore licence fee it paid in 2008 for permits of its Indian venture Uninor in ...

Quick Links

Advertisement

Back to Top