Dr Reddy's Laboratories on Wednesday announced an agreement with Wockhardt Ltd. to acquire select divisions of its branded generics business in India, Nepal, Sri Lanka, Bhutan and Maldives for a consideration of Rs 1,850 crore.
The agreement comprises a portfolio of 62 brands in multiple therapy areas such as respiratory, neurology, VMS, dermatology, gastroenterology, pain and vaccines. Wockhardt will transfer Dr Reddy's related sales and marketing teams; and the manufacturing plant located in Baddi, Himachal Pradesh with all plant employees. The business undertaking is being transferred on a slump sale basis, according to the company.
"India is an important market for us and this acquisition will help in considerably scaling-up our domestic business. The acquired portfolio shall enhance Dr Reddy's presence in the high growth therapy areas. We believe the portfolio holds a lot of potential and will get an impetus under Dr Reddy's. We welcome the team joining as part of the deal to the Dr Reddy's family," G V Prasad, the company’s co-chairman and managing director said. Dr Reddy's expect to close the deal in the first quarter of financial year 2020-21.
Dr Reddy's made India-centric product acquisition last time in 2015. It had acquired Belgian company UCB's select product portfolio business in India, besides Nepal, Sri Lanka and Maldives for Rs 800 crore, The acquisition of UCB's existing brand equity in the areas of dermatology, respiratory and pediatrics diseases will further expand Dr Reddy's footprint into these fast growing areas, it said earlier. The transaction also included 350 employees engaged in operations of India business.
Dr Reddy's recently revealed that it was aiming to become one of the top five players in the Indian market and also exploring inorganic opportunities in India and emerging markets, the two focus areas for its business growth in coming days.