Sun is open to deals in Europe to boost scope, Makov says

Chairman says drug maker seeks to become a major global player in the specialty-pharma business
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First Published: Thu, Jan 03 2013. 01 11 AM IST
Sun has followed a strategy of acquiring under-performing or unprofitable companies and merging their operations into the Mumbai-based drugmaker. Photo: Mint
Sun has followed a strategy of acquiring under-performing or unprofitable companies and merging their operations into the Mumbai-based drugmaker. Photo: Mint
Tel Aviv: Sun Pharmaceutical Industries Ltd is open to acquisition opportunities in Europe and globally as India’s largest drug maker by value seeks to add products and extend its geographical reach, chairman Israel Makov said.
We can look at Europe, we can look at other areas of the world, Makov, 73, said in an 31 December interview at the Tel Aviv offices of his Bio Light Israeli Life Sciences Investments Ltd. You know, you have a list of priorities, but eventually you have a list of opportunities too. While we may have geographical priorities, you naturally have a list of opportunities that come along the way.
The drug maker, which gets more than 80% of its sales from the US and India, is looking for acquisitions in Europe including a possible takeover of German generic-drug maker Stada Arzneimittel AG, people familiar with the matter said in August. Sun has sought to raise about $1 billion for a European deal and executives toured Europe to meet with potential targets, Bloomberg reported at the time. Makov declined to comment specifically on whether Sun is considering an acquisition of Stada, which is based in Bad Vilbel.
Stada’s shares gained 2.4%, the biggest gain since 19 December, to €24.95 in Frankfurt.
Sun has followed a strategy of acquiring under-performing or unprofitable companies and merging their operations into the Mumbai-based drug maker. Sun bought controlling stakes in 10 companies in the past 14 years, including the acquisition of a majority stake in Israel’s Taro Pharmaceutical Industries Ltd.
Specialty focus
The company would like to become a major global player in the specialty-pharma business, said Makov, who as former chief executive officer of Teva Pharmaceutical Industries Ltd. helped turn that company into the world’s biggest generic-drug maker. We are looking both for companies that will enhance our specialty-pharma focus and our geographical reach.
Sun shares have risen 49% in the past year, giving the company a market value of Rs.76,600 crore ($14.1 billion).
Sun, which owns 61% of Taro, said on 13 August that it’s seeking to take the Yakum-based company private by buying the remaining shares at $39.50 apiece in a deal approved by Taro’s board. Minority shareholders voiced opposition to the deal, saying Taro is worth more. The stock has gained 21% since the August announcement to $49.49 as Taro said second-quarter sales rose 16% to $161 million.
The company did better than expected, there is no question. But I don’t want to enter into the reasons for that, Makov said. There is a process to try to conclude the situation but I can’t go into the details. BLOOMBERG
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First Published: Thu, Jan 03 2013. 01 11 AM IST
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