Dabur Pharma Ltd, one of the country's anti-cancer drug makers, has sold off a total 73.3 per cent stake in the company to the Singapore unit of Germany's Fresenius Kabi AG for Rs 8,782 million (€ 139 million) or at 76.5 rupees apiece. The move allows the Burmans of Dabur Pharma (who held 65.3 per cent of the equity in March 2008) to exit the pharmaceutical business and concentrate more on the bread-and-butter FMCG business under Dabur India and its new retail venture.
The new acquirer Fresenius Kabi also announced a public offer to acquire up to a further 20 per cent shareholding for a price of Rs 76.50 per share in cash. Fresenius Kabi has entered into an agreement with a third party to secure the participation of 2.4 per cent of Dabur Pharma's share capital in the public offer.
The acquisition significantly expands Fresenus Kabi's intravenously administered drugs portfolio and secures its supply of high quality APIs for cytostatics. With the acquisition of Dabur Pharma, Fresenius Kabi would also broaden its offering of patient-specific oncology therapies. In future, Dabur Pharma would supply Fresenius Kabi's compounding centres in Europe, Asia-Pacific and Latin America where patient-specific formulations of drugs and parenteral nutrition are being prepared for cancer patients, the German company said in a release.
Dabur Pharma, headquartered in New Delhi, is one of the leading suppliers of generic drugs and active pharmaceutical ingredients (API) to treat cancer. The company holds a substantial number of drug registrations in Asia, Europe and the US. Dabur Pharma is also one of the few manufacturers worldwide to hold international registrations for all steps within the manufacturing process of cytostatic agents. The company operates two production facilities in India and one in Great Britain as well as a research and development centre equipped in accordance with European and US standards near New Delhi.
Dabur Pharma recorded sales of more than € 41 million with generic oncology drugs and APIs in fiscal year 2006-07 and employs about 960 people. Dabur Pharma pursues an international growth strategy and would benefit from Fresenius Kabi's international sales and marketing organisation going forward, the release said. In addition, Dabur Pharma would continue to be focused on expanding its research and development.
The acquisition will be entirely debt-financed from funds that have already been procured. The transaction is expected to be accretive to Fresenius Group's Cash EPS in 2-3 years.
Closing of the transaction is subject to completion of the public offer process in line with local regulations as well as relevant approvals required under Indian law. This is expected to occur at the beginning of Q3 2008.