Cipla gains after UK subsidiary acquires a 51% stake in Quality Chemicals

Cipla rose 0.53% to Rs 678.25 at 9:28 IST on BSE after Cipla (EU), U.K., the wholly owned subsidiary of the company, has entered into a definitive agreement to acquire a 51% stake in Quality Chemicals, Uganda from the existing shareholders.

The company made announcement after market hours yesterday, 21 May 2015.

Meanwhile, the S&P BSE Sensex was up 63.71 points or 0.23% at 27,873.06.

On BSE, so far 7,094 shares were traded in the counter as against average daily volume of 1.89 lakh shares in the past one quarter.

Shares of pharma company hit a high of Rs 680 and a low of Rs 675.75 so far during the day.

Cipla said that as per the agreement, the cash consideration for 51% stake is payable in tranches with approx. $8 million payable upfront on completion and 5 equal installments of $4.41 million payable at annual intervals thereafter. The transaction is expected to be completed by end of July 2015, subject to completion of certain conditions precedent.

QCL was incorporated in the year 1997 and is engaged in the business of import and distribution of pharmaceutical and consumer products. QCL also holds a 22.05% stake in Cipla's subsidiary in Uganda, Cipla Quality Chemical Industries (CQCIL). Consequent to this acquisition, Cipla's effective stake (held through its subsidiaries) in CQCIL will increase from the existing 51.05% to 62.30%. This acquisition will further strengthen the company's overall presence in the African market, Cipla said.

The turnover of QCL for the financial year ending December 2012, December 2013, December 2014 was Ugandan Shilling 15.76 billion, Ugandan Shilling 17.02 billion and Ugandan Shilling 14.85 billion respectively.

None of the persons belonging to promoter/promoter group(s) of the company has any interest in the transaction and it is not a related party transaction for the company, Cipla said.

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