Ranbaxy to set up SPV for Merck bid
By Gaurie Mishra, TNN |
Highlights
NEW DELHI: Ranbaxy Laboratories is considering setting up a special purpose vehicle (SPV) for launching a bid on Merck���s generic business. The SPV route has been used recently by many companies for overseas acquisitions.
���We are considering the option of the SPV structure but nothing is finalised. We are evaluating the option of raising funds through a combination of private equity and debt as well as doing the funding through our own resources,��� MD and CEO, Ranbaxy Laboratories, Malvinder Singh told ET. If Ranbaxy decides to take the SPV route, the debt and private equity funds as well as Ranbaxy���s own funds will be infused into this vehicle.
Merck is looking to sell its generics division, in a deal that could be valued at $5.2 billion. The generics business clocks revenues of around $2.5 billion and if Ranbaxy is able to acquire it, the Indian company���s revenues could nearly triple to around $3.8 billion.
The bidding process and due diligence are expected to begin in February. According to international media, leading generic companies such as Teva and Sandoz and private equity majors such as Blackstone and KKR could be in the race as well. Ranbaxy has in the past secured shareholders approval to raise $1.5 billion, out of which it has already raised $440 million through FCCBs.
Mr Singh said the total number of Ranbaxy���s first-to-file (FTF) applications has risen to 20 with the company making two new FTF filings. Ranbaxy is taking a 14.9% stake in Hyderabad-based Krebs Biochemicals and Industries for nearly $2 million.
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Ranbaxy COO Atul Sobti said the company would in the future increasingly look at the model of entering into partnerships with companies for technologies and manufacturing facilities. In the specific case of Krebs, Ranbaxy was looking at leveraging its statin technology.Start a SIP with as low as ₹500 with ET Money App!
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