Cipla Ltd. to Buy Cipla Medpro for $215 Million
11/21/2012 7:54:48 AM
Indian drugmaker Cipla plans to offer $215 million for a majority stake in South Africa's Cipla Medpro to strengthen its presence in Africa's fast-growing market for cheap, generic versions of branded drugs. The proposed bid for a 51-percent stake in South Africa's No.3 drug company highlights international pharmaceutical firms' growing interest in the continent, particularly as a market for low price versions of medicines that are off patent. Cipla, which supplies the bulk of Cipla Medpro's drugs but has so far not owned a stake in the business, sells generic drugs to treat HIV and cancer in emerging markets. The proposal also highlights the rise of so-called "south-south" deals, where Indian and Chinese firms buy into Africa, lured by its rising incomes and a surging population. "Like most industries with a heavy focus on developed markets, pharmaceuticals are struggling to find growth. Many are looking to Africa to build up their distribution pipeline," said Nic Norman-Smith, chief investment officer at Lentus Asset Management in Johannesburg. "It's not surprising that Cipla are trying to consolidate their position in South Africa," he added.