The Ahmedabad-based pharmaceutical major Cadila Healthcare Ltd (Zydus) is in final stages of negotiations to form a joint venture between "Dial For Health," its retail pharmacy chain and the Mumbai-based Green Cross Healthcare Pvt Ltd, the pharmacy retail chain floated recently by the members of Maharashtra chemists association or MSCDA.

The idea is to create a synergy between the retail chains and form a single pharmacy retail company under the likely name "Green Cross- Dial For Health," with either parties (Dialforhealth and Green Cross) holding 50 per cent stake in the new company. Both the companies are likely to put in Rs 50 lakh each as the initial investment amount in the new joint venture.

Confirming the development, senior Zydus officials told Pharmabiz.com, "We are in the final stages of negotiations and the deal is likely to be concluded by September 27." However, the company officials refused to divulge more details of the deal.

Dialforhealth India Ltd is operational mainly in the Western region of the country including Mumbai and Gujarat with around 30 retail outlets. In Mumbai, the company has eight retail outlets.

Green Cross Helthcare Pvt Ltd has a chain of 50 shops in Mumbai. The company aims to increase its membership to 400 members within three years. The revenue earned in the new JV will be shared equally between the partners. There will be a separate space for Zydus' products in every retail outlet of the new company, it is learnt. Moreover, a partnership with a private corporate like Zydus will bring more professionalism in the services of the joint venture, said sources.

Although the current joint venture is restricted to Mumbai, Zydus has plans to tie up with retail associations in other cities and states, for further expansion.

According to market sources, the tie-up will be fruitful to both the companies. "Zydus will be able to get an effective reach across all regions of the city utilising Green Cross' chain. At the same time, Green Cross can utilise Zydus strength to compete with private pharma retailing companies like Medicine Shoppe or Health & Glow," said a Mumbai-based real estate analyst.

Above all, such partnerships will fuel competition among other corporates also to strike similar deals with neighbourhood chemists, which is good for the industry, they said.

Maharashtra State Chemists and Druggists Association (MSCDA) is encouraging its members to merge together to form a single corporate company across the state. Under this corporatisation plan, 100-300 members across various regions of the state are encouraged to come together. Green Cross is an example of such an alliance.