India's Dr Reddy's Laboratories and Ranbaxy Laboratories said on Monday they are seeking acquisitions, and analysts said both drug makers could target U.S.-based Bradley Pharmaceuticals.
A spokeswoman for Dr Reddy's declined to comment on media reports that the company was eyeing Bradley, which has a market capitalisation of about $330 million, but said acquisitions were on the Hyderabad-based firm's agenda.
We will always be open to opportunities, she said.
Dr Reddy's acquired Germany's Betapharm last year for $572 million, while Ranbaxy, the country's leading drug marker by sales, bought Romania's Terapia for $324 million last year, but neither company has made an acquisition this year.
Although turmoil in global markets and worries of a squeeze in credit availability have slowed Indian outbound M&A deals in recent months, analysts said financing was not a big issue for Indian drug makers if they spotted a good deal.
Getting funds is not such a big issue for these companies, said Sarabjit Kaur Nangra, an analyst at Angel Broking Ltd, who expected both Ranbaxy and Dr Reddy's to bid for Bradley.
Consolidation is required for expanding market share. Any target that comes up, if it provides bigger size, most of these companies would be going for it, she said.
Last year, Dr Reddy's, second in sales among Indian drug makers, raised $200 million by issuing American shares.
It was to be used for capacity enhancement, acquisitions etc, the spokeswoman said.
Sun Pharmaceutical Industries, India's biggest drug maker by market capitalisation, plans to raise 35 billion rupees
($850 million) to fund purchases in the international generic market.
Ranbaxy, which acquired eight firms last year but withdrew from the race for the generics unit of Merck KGaA earlier this year, said it was eyeing acquisitions the United States and Europe.
We cannot comment on speculations. However, growth through acquisitions is one of our stated strategies and is one of the key growth drivers to expand the business, a company spokesman said.
Ranbaxy is looking at acquisitions in the U.S., Europe, India and other emerging markets. We will consider target companies based on the value and the synergies that can be unlocked from such a deal.