Mumbai: India’s Aventis Pharma , a unit of French drug maker Sanofi , is close to buying the over-the-counter business of Universal Medicare for about Rs 500 crore ($109.5 million), two sources with direct knowledge of the matter said on Tuesday.
A deal, which covers about 30 brands sold by unlisted India-based Universal Medicare, is expected to be signed in a day or two and would boost the French company’s over-the-counter business in India, the sources said.
The products included in the deal have annual sales of Rs 100 crore-115 crore, the sources said.
“Sanofi’s OTC business in India was quite nominal ... and the products are profit making,” one of the sources said, declining to be identified because the details were not yet public.
Over-the-counter products made by Indian firms have been acquisition targets for multinational drug companies looking to expand their footprint in the fast-growing market.
The over-the-counter products segment in Indian is valued at roughly 20-30 billion rupees and is growing at 17-18% annually, faster than the 12-15% growth in the broader pharmaceutical sector, according to ICICI Securities analyst Siddhant Khandekar
“Sanofi has been looking for OTC brands and this is just like grabbing an opportunity for them,” he said.
“Issues related to prescriptions and advertising do not affect this segment,” he said.
In December, British consumer goods company Reckitt Benckiser agreed to buy privately-held Indian firm Paras Pharmaceuticals, which makes a number of medications, for about $726 million.
In May, Johnson & Johnson agreed to buy several over-the-counter medicines sold in Russia from India’s JB Chemicals and Pharmaceuticals Ltd for about $260 million.
Earlier, the Economic Times reported that Sanofi was in advanced talks for a strategic tie-up with Universal Medicare, which makes popular cod liver oil capsules brand Seacod.
The acquisition has a medium-term non-compete clause for Universal Medicare and also involves the transfer of related marketing and distribution operations to Aventis Pharma, the sources said.
A Sanofi spokeswoman declined to comment, while officials of Universal could not be immediately be reached for comment.
Shares of Aventis Pharma, which have gained 6.2% this year, compared to a 12.4% drop in the broader India healthcare index , were trading down 1.4% at 2,034.05 rupees at 0607 GMT in a weak Mumbai market on Tuesday.
Aventis Pharma reported net profit of Rs 231 crore for the year ended December 2010 on net sales of Rs 1,085 crore.