Granules looks to buy controlling stake in Chinese co

MUMBAI: Hyderabad-based pharma firm Granules India is close to finalising a Rs 180-200-crore deal with a Chinese pharmaceutical company. The mid-sized company is in talks with three Chinese pharma firms — Handong Xinhua Pharmaceutical Co, Shanxi Haizheng Scientific Tech and Trade, and Hubei Biocause Heilen Pharmaceutical Company — to pick up controlling stake in one of them, according investment banking sources. The company is expected to close the deal in next few days, they said.

Granules India is looking to acquire the manufacturing assets of the company with a strong presence in the Ibuprofen, and subsequently transfer it to a joint venture company, where both parties will hold equal stake.

The move is in line with Granules India’s overall strategy of offering end-to-end solutions to companies in the over-the-counter (OTC) products segment. Last year, the company had mobilised $15m through a GDR issue.

“The company is on the lookout for a strategic fit to complement its strategy to enter the regulated and non-regulated markets. The acquisition is likely to complement its ongoing capacity expansion plans,” a source close to the development said.

Krishna Prasad, MD, Granules India, declined to comment on the deal, but said his company was on the lookout for acquisition. “We have strong presence in various active pharmaceuticals ingredients (API) and are in the process of acquiring various API technologies as well as corporates which has significant presence in the overseas market,” he said. “We are in negotiations with various companies across the globe. At present, we cannot comment any thing on the deal,” he added.

At present, Granules India is one of the leading manufactures of granulated paracetamol in the world. The company is in the process of becoming an integrated player by January ’07 when its tablet-making plant would be ready to start commercial production.

The company is shifting its focus from OTC to prescription-based paracetamol drugs in the US and European markets Granules has also plans to start filing Abbreviated New Drug Applications (ANDAs) from calendar year ’07 in paracetamol-related products for its customers. During ’07, the company plans to file 10 ANDAs and five to six every year thereafter. ANDA approvals would help the company market its product in the US markets.