Indian players are focusing on capturing emerging opportunities in niche specialties, which offer higher and more sustainable margins to compete with international counterparts. Manish K. Pandey analyses...
There was a time when we spoke of the Ranbaxies and the SunPharmas of India in the same breath as we spoke of mega cross-border
mergers and acquisitions (remember the plus-$500 million foreign deals that these giants struck?). That was about two years back. Then came 2007, a period filled with lull and silence and except the R&D (re)search-and-seek game, nothing grand made the headlines in the M&A spirit. It’s 2008 now, and once again comes the crest of activities for the domestic players. And just when we all thought that the pharma kings were following the path tread before (of ‘big-ticket’ acquisitions), something ‘strategically’ interesting has come to surface. Scouting for growth, the industry is turning its back to mega deals when it comes to M&As (even as international players move in for a kill with significant resources), and they have started looking at smaller, strategic acquisitions now.
It was just last month when Indian Pharma majors took over strategic units of eight drug-makers. While the biggest deal (of the six cross-border acquisitions) included the $255 million buyout of US-based Draxis Health by Jubilant Organosys, (a mid-size pharma player), the rest were comparatively smaller, with deal size ranging anywhere between $25-$100 million, which included SIRO Clinpharm’s acquisition of Omega Mediation and Jupiter Bio’s buyout of Merck Life Sciences’ contract research unit. In fact, this is a trend which even global pharma giants are adopting as a consolidation trend. And out of the total 20 coup d’états (both domestic and international) worth $660 million (Grant Thornton), which the industry has announced since the start of this year, more than 90% deals have been in the $25-$100 space.
There was a time when we spoke of the Ranbaxies and the SunPharmas of India in the same breath as we spoke of mega cross-border
mergers and acquisitions (remember the plus-$500 million foreign deals that these giants struck?). That was about two years back. Then came 2007, a period filled with lull and silence and except the R&D (re)search-and-seek game, nothing grand made the headlines in the M&A spirit. It’s 2008 now, and once again comes the crest of activities for the domestic players. And just when we all thought that the pharma kings were following the path tread before (of ‘big-ticket’ acquisitions), something ‘strategically’ interesting has come to surface. Scouting for growth, the industry is turning its back to mega deals when it comes to M&As (even as international players move in for a kill with significant resources), and they have started looking at smaller, strategic acquisitions now.It was just last month when Indian Pharma majors took over strategic units of eight drug-makers. While the biggest deal (of the six cross-border acquisitions) included the $255 million buyout of US-based Draxis Health by Jubilant Organosys, (a mid-size pharma player), the rest were comparatively smaller, with deal size ranging anywhere between $25-$100 million, which included SIRO Clinpharm’s acquisition of Omega Mediation and Jupiter Bio’s buyout of Merck Life Sciences’ contract research unit. In fact, this is a trend which even global pharma giants are adopting as a consolidation trend. And out of the total 20 coup d’états (both domestic and international) worth $660 million (Grant Thornton), which the industry has announced since the start of this year, more than 90% deals have been in the $25-$100 space.
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