Monday, April 21, 2008

European firm buys Dabur for Rs 880 crore

Deal values the company at Rs 1,199 crore.

Dabur is exiting the pharma business. The Burman family, promoters of FMCG major Dabur, has sold the oncology drug manufacturing company - Dabur Pharma - to European healthcare major Fresenius SE for about Rs 880 crore.

The Burmans, along with some key stakeholders, have agreed to sell their 73.27 per cent stake at a price of Rs 76.50 per share, a 10 per cent premium over the current market price. The deal values Dabur Pharma at Rs 1198.75 crore.

When contacted, Anand Burman, chairman of Dabur declined to comment on the deal. The acquisition will be routed through the European company’s Singapore subsidiary Fresenius Kabi (Singapore).

This is the second largest buyout by an overseas pharmaceutical company in India, next only to the Matrix Laboratories takeover by Mylan Laboratories of the US for about Rs 3,367 crore.

The Iceland-based Actavis, one of the top global generic companies, had acquired the bulk drug division of the Chennai-based Sanmar Specialties and the tablets division of Grandix Pharmaceuticals, a few months ago, in two separate deals.

Dabur Pharma is one of the leading players in the field of oncology in India and is among the top generic oncology companies in various markets, including in Thailand, Philippines, Malaysia and India.

Besides being present in more than 40 countries, the company has a strong base in the US. It has a substantial market share in Paclitaxel and Irinotecan injections used in the treatment of rectum cancer. Dabur has 12 generic drugs pending for approval in the US market. It has already received four approvals.

“Dabur is an FMCG company and the move of the Burmans to exit from the pharma business is aimed at focussing on the high investment intensive FMCG business,” said Sujay Shetty, associate director of PricewaterhouseCoopers.

Dabur had demerged its pharma business in 2003 to set up Dabur Pharma. Last year, the company hived off its non-oncology formulation business to Ahmedabad-based Alembic for Rs 159 crore to focus exclusively on the cancer drug business.

The deal will considerably strengthen the ¤2 billion oncology business of Fresenius. Dabur Pharma, which posted a net profit of Rs 19.7 crore on a turnover of Rs 322 crore in 2006-07, is India’s leading player in cancer medicines with a revenue of over Rs 60 crore annually.

The company has three manufacturing facilities at Kalyani, Baddi and at Bardon, UK. It also owns a marketing arm - Biosciences Co - in Thailand.

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