Torrent lines up at least $5 billion funding to buy 33% stake in Cipla

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By Baiju Kalesh, P R Sanjai and Manuel Baigorri

Torrent Pharmaceuticals Ltd. has lined up at least $5 billion in funding as the company is seeking to buy a stake in Mumbai-listed drugmaker Cipla Ltd., according to people familiar with the matter.  
 

Torrent has secured commitments from a group of overseas banks for a potential deal, the people said, asking not to be identified as the information is not public. The company has been looking to buy the whole or part of the 33% stake in Cipla that’s held by the family shareholder group, the people said.
 

While Torrent has the funding ready, the firm is only keen to proceed with a transaction at a valuation below $11 billion, the people said. Cipla’s shares have surged as much as 19% since late July when local media reported that the founding family may sell their stake. Cipla is valued at about $11.7 billion as of Friday trading in Mumbai.

 

Torrent may also tie up with private equity funds to bid for the 33% stake, which is worth about $3.9 billion based on Cipla’s current stock price, the people added.
 

Deliberations are ongoing and Torrent can still decide against proceeding with an offer, the people said. It’s also unclear whether the founding family of Cipla will agree to sell as they are demanding a valuation of about 1.09 trillion rupees ($13 billion) as Bloomberg News has reported. Representatives for Cipla and Torrent didn’t immediately respond to requests for comment.
 

A successful deal will give Torrent Pharmaceuticals, founded in 1959, more heft in India’s drug manufacturing sector. With a market value of about $7.8 billion, the company has expanded through a string of acquisitions in the last two decades, according to its website.
 

Cipla had risen to global prominence by pioneering the sale of cheap, generic HIV drugs across Africa at the turn of the millennium. Cipla’s sales were boosted during the pandemic by Covid-19 treatments such as the license to manufacture and market Gilead Sciences Inc.’s remdesivir in 127 countries including India and South Africa. The company has a presence in more than 80 countries and provides over 1,500 products across various therapeutic categories, its website shows.