Dr Reddy's jumps ~1.5% as it announces acquisition of German medical cannabis Nimbus Health GmbH

25 Feb 2022 , 10:58 AM

Dr. Reddy’s Laboratories Ltd. announced that the company has entered into a definitive agreement to acquire Nimbus Health GmbH. Nimbus is a privately owned and licensed pharmaceutical wholesaler from Germany focusing primarily on medical cannabis in Germany.

The consideration for this acquisition is set as an upfront payment plus performance and milestone-based earn-outs over the next four years.

Nimbus was founded in 2018 and is among the top companies for medical cannabis in Germany.

This acquisition will Dr. Reddy’s Laboratories to leverage Nimbus Health’s strengths and introduce medical cannabis-based medicines as an assuring treatment option for patients.

The company will be operating under its own brand Nimbus but as a wholly-owned subsidiary of Dr. Reddy’s.

There has been vast improvement in demand for medical cannabis over the past years led by the legalization of medical cannabis by the German Parliament (Bundestag) in 2017. The cannabis market is valued at ~122 million Euros in Germany with nearly 25% growth in 2021 as compared to 2020, and a CAGR of ~55% since 2017. Germany is the largest market of cannabis in Europe.

Dr Reddy’s was trading 1.41% higher at Rs4,150.10 against its previous closing price of Rs4,092.50. The company touched day’s high and low of Rs4,165 and Rs4,102.10 respectively.