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Ranbaxy acquires Terapia of Romania
By agencies
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Thursday, 30 March 2006, 20:30 IST
NEW DELHI: India's largest pharma firm Ranbaxy Laboratories Ltd. has bought Romania's leading generic drug producer Terapia for $324 million, as part of its plans to expand presence in the European market.
The announcement about Terapia came two days after Gurgaon based Ranbaxy said it was acquiring GlaxoSmithKline PLC's generic business in Italy.
Ranbaxy, which is among the world's top 10 generic drug makers, has mostly relied on the U.S. market for its global sales, but the company is now increasingly looking to Europe. Last month, it lost to rival Dr Reddy's Laboratories in a bid for German drug maker Betapharm.
The Terapia buy will provide the company with "proximity and access to high growth markets," Ranbaxy Chief Executive Malvinder Singh said in a statement.
"The transaction is compelling and furthers us on our path to becoming a top five global generic company," Singh said.
The company will pay four times Terapia's annual sales in 2005 to acquire 96.7 percent stake in the company. Singh defended the purchase price, pointing to Terapia's huge sales force and earnings margins of 35 percent.
Increasing competition and pricing pressures in the American market for generic drugs, where the Food and Drug Administration have eased entry rules in the past two years, has driven Ranbaxys focus on Europe.
The company collects more than a quarter of its global revenue from the U.S., where its sales declined 22 percent to $331 million in 2005. Sales in Europe, however, increased 5 percent.