Bain contacts Dr Reddy's Laboratories to collaborate on a joint offer for Cipla

5 Sep 2023 , 12:47 PM

Bain Capital, a US buyout firm, has reached out to Dr Reddy’s Laboratories (DRL) to discuss a potential joint offer to acquire the Hamied family, Cipla’s promoters.

According to news reports, senior leadership from both sides met last week with their advisors to discuss and formalize a strategy.

The lone Indian strategic investor at the moment, Torrent Pharma, is thought to be examining the possibilities and opposing the offer from DRL. For the Hamieds’ part in the 88-year-old business, Torrent has made a non-binding offer, competing with private equity companies Blackstone and Baring Private Equity Asia-EQT (BPEA-EQT).

According to a September 1 report from ET, Bain Capital is another private equity (PE) fund that Torrent has been in talks with to raise up to Rs 8,300 crore ($1 billion) as part of its financing strategy for a potential $7 billion-plus purchase, the largest ever in India.

The combined entity would become the top domestic Indian-origin pharma major based on its FY23 revenue of 47,338 crore, with a consolidated market share of 8% (based on June 2023 Indian Pharma Market data). If DRL decides to participate, it will not only improve the competitive bidding landscape for Cipla.

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