Torrent Pharma may have made a non-binding offer to buy a stake in Cipla

1 Sep 2023 , 02:13 PM

According to reports cited by CNBC-TV18, Cipla has received a non-binding offer from Torrent Pharma. In addition, Torrent Pharma has started investigating Cipla as part of this possible venture.

The fourth-largest domestic pharmaceutical company, Cipla, is the target of Torrent Pharma, according to reports. However, Cipla’s revenue for the fiscal year 2023 was more than twice as much as Torrent Pharma’s.

Torrent Pharma is looking into ways to form a consortium with other private equity funds, including Blackstone and Bain PE Asia-EQT among the potential partners, as well as with international institutions to ensure the realization of their strategic aspirations. This is done in an effort to possibly strengthen its position.

An earlier report had suggested that Torrent Pharma would be interested in purchasing the 33.47% stake in Cipla held by the Hamied family. According to preliminary calculations, the prospective buyer could need to make a $7.06 billion investment to obtain a 59.47% ownership.

Between itself and Cipla, Torrent Pharma has found that there is only a minimal 5% sales overlap in India. Cipla’s position in both the Indian and US markets is seen by the company—which has a market capitalization of Rs 624.09 crore—as a promising opportunity for synergy.

If the acquisition is approved, it will be the biggest Indian pharmaceutical deal in almost a decade. However, Chairman YK Hamied described any prospective developments regarding the promoter interest sale as ‘speculative’ in his speech at Cipla’s annual general meeting.

If the merger goes through, the combined company will overtake Sun Pharma as the second-largest pharmaceutical company in India in terms of revenue.

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