Mumbai: After weeks of speculation over whether the pharma major Ranbaxy Laboratories will or will not make a takeover bid for for Orchid Chemicals & Pharmaceuticals, Tuesday saw the announcement of a business alliance agreement between the two companies. Ranbaxy, through open market operations has accumalated a 14.7% stake in Orchid till date, triggering speculations of an Open Offer. Orchid, in return, has strengthened its mechanisms to aviod a hostile takeover bid.
The present alliance involved multiple geographies and therapies for both finished dosage formulations and active pharmaceutical ingredients.
Further, the pact would establish a framework for enhanced future co-operation between the two companies, Ranbaxy said in a filing to the Bombay Stock Exchange.
“We are pleased to enter into this long term strategic alliance with Orchid. The agreement will be mutually beneficial and synergistic, allowing both organisations to leverage each others inherent strengths,” Ranbaxy CEO and MD Malvinder Mohan Singh said.
Commenting on the business alliance, Orchid Managing Director K Raghavendra Rao said, “Ranbaxy’s global scale and market reach and Orchids state-of-the-art development and manufacturing capabilities would expand the business of both companies.”
In afternoon trade, shares of Ranbaxy were trading at Rs 488, down 2.19%, while Orchid Chemicals were trading at Rs 254.80, up 2.17% on the BSE.