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| Novartis offers to buy 39% more in Indian subsidiary |
| Bloomberg / Mumbai Mar 26, 2009, 00:06 IST |
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Novartis India Ltd. surged by the daily limit in Mumbai trading after Swiss parent Novartis AG said it will buy as much as 39 per cent in the unit for Rs 440 crore ($87 million).
Novartis India rose 20 per cent to Rs 330.7. The purchase will raise Basel-based Novartis’ stake to almost 90 per cent.
The Swiss company offered Rs 351 a share, 27 per cent more than yesterday’s closing price.
The acquisition by Switzerland’s second-biggest drugmaker will boost its share of a pharmaceutical market that may triple in size to $16 billion from 2005 to 2015, according to estimates by Deloitte LLP.
“We just wanted to streamline our set-up there,” Eric Althoff, a spokesman for Novartis, said by telephone. It’s too early to say if Novartis will delist its subsidiary, he added.
Novartis India distributes some of the Swiss company’s best-selling branded drugs, including a treatment for osteoporosis, and the Swiss parent aims to cater more to the health needs of low-income people in rural villages, according to its 2008 annual report.
India’s rural market represents 70 per cent of the country’s population and almost 60 per cent of its national disposable income, according to the report.
Disputes over intellectual property rights have hampered Novartis in India. Two years ago, the drug-maker decided against investing in the country after an Indian court rejected a patent on its best-selling cancer drug Gleevec and turned down Novartis’s appeal.
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