Ranbaxy Laboratories Ltd, India's top drugmaker by sales, will raise its stake in Zenotech Laboratories Ltd to 45 percent to expand into the global biogenerics market, it said on Wednesday.
Ranbaxy will spend 2.14 billion rupees ($53.9 million) to acquire an extra 38 percent holding at 160 rupees a share in the Indian biopharma firm, Ranbaxy's chief executive Malvinder Singh told reporters at a press conference.
The transaction will be funded through a combination of internal accruals and debt, and values Hyderabad-based Zenotech at 5.63 billon rupees.
The deal gives us a tremendous opportunity to leverage our strong position in emerging markets and developed markets, Singh said.
Ranbaxy would enter the biogenerics market in Europe by the end of 2010 or in early 2011 and in the United States in the longer term, Singh said.
Zenotech's product pipeline addresses about a third of the $65 billion global biopharmaceuticals market, the statement said.
It has three approvals from Indian authorities for its drugs for cancer treatment, and has a pipeline of seven more biopharmaceutical products, the statement said.
Ranbaxy will make an open offer for a further 20 percent of Zenotech, at the same price, or a price decided by the market regulator, Singh said.
It is also considering options for its research into new drugs, including hiving the operation off, seeking private investment or holding a minority stake. We are evaluating and exploring different models, Singh said in reply to a question on plans for the research operations.
Zenotech shares rose 10 percent, closing at 167.30 rupees in a Mumbai market that rose nearly 3 percent, while Ranbaxy closed marginally down at 438.60 rupees.