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Planning 29 Apr 2015

Pharma major Sun Pharma may spend $7bn on further acquisitions

Soon after acquiring its domestic rival Ranbaxy Laboratories, Pharma major Sun Pharmaceuticals Industries Ltd is keen to spend another $7 billion to satisfy its craving for more takeovers.

Emboldened by its takeover of domestic rival Ranbaxy Laboratories, India's leading Pharma company Sun Pharmaceuticals Industries Ltd is willing to spend as much as $7 billionon further acquisitions

The biggest deal till date at $3.2 billion, the Ranbaxy deal of Sun Pharma has given it sufficient scale in generics and emerging markets to think about its next step - beefing up expertise in higher margin products and gaining a bigger global presence.

As per the latest findings of leading business dailies, next on Sun Pharma's radar are US and European companies that develop bio-similars and cheaper copies of biotech drugs, which have become some of world's hottest selling medicines.

Dilip Shanghvi, who controls Sun Pharma with his scions and is India's second richest man as per the globally renowned Forbes magazine, feels the need for a ‘transformational acquisition’, but will be patient about finding the right candidate, said sources.

The Sun Pharma, which has a present market value of about $36 billion, is also interested in non-biotech complex generic medicines that offer better margins than the copied drugs specialised by Indian drugmakers.

Reportedly, the Pharma major is willing to look at either whole companies or acquire complex generics on their own, declining to be identified as they were not authorized to speak to the media on the matter.

In one potential near-term opportunity, Sun Pharma may emerge as a bidder for some drugs Teva Pharmaceutical Industries, the world's biggest generic drugmaker, will likely be required to divest if it is successful in its unsolicited $40 billion bid for rival Mylan.

With a cash balance of $1.5 billion and a debt-to-equity ratio of just 0.13, Sun Pharma would find it easy to take on debt to fund any large acquisition.
 

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