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Dr Reddy's buys Betapharm
By agencies
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Thursday, 16 February 2006, 20:30 IST
MUMBAI: One of IndiaÂ’s largest drug maker, Dr Reddy's Laboratories Ltd today said it would acquire German generic drug maker Betapharm for $572 million.
Apart from Dr. ReddyÂ’s, rival pharma company Ranbaxy Laboratories was also in the reckoning for the German company.
The acquisition will add about $200 million to Dr. Reddy's revenues immediately, chief executive G V Prasad said. The transaction is likely to close in the first week of March.
"We're happy with the price we paid, Prasad said.
Dr Reddy's said the purchase will be financed from cash reserves and debt, and it may consider issuing securities.
Based in Augsburg, Betapharm is Germany's fourth-largest generic pharmaceuticals company and its portfolio comprises about 145 products with a focus on long-term therapy products. The company had a gross turnover of 164 million euros in 2005.
"Germany is the biggest generic market after the U.S., and it doesn't have the intense price pressure we have been seeing in the US and UK markets," Prasad said. "But in Germany one cannot do an organic build up, so it made sense to acquire," he said.
Dr Reddy's is also open to more acquisitions, Prasad said.
"We have the bandwidth for further acquisitions in Europe. We will look at small and medium-sized acquisitions to give us presence in other countries," he said.
"Sometimes you have to be opportunistic and grow aggressive when the right opportunity comes by," Prasad added.