Hyderabad: Aurobindo Pharma Ltd, India’s fourth-largest drug maker, is considering joining the race to buy assets of over $1 billion from Teva Pharmaceutical Industries Ltd that are being divested by the Israel-based company in the UK, Ireland and Iceland as a precondition to Teva’s acquisition of Allergan Plc.’s generic business, a Bloomberg report said on Tuesday.
The report quoting people familiar with the matter said the deal would be financed by a loan of more than $1 billion and no final decision has been made, and the company could still decide against a bid.
A buyer for its UK, Ireland and Iceland assets could emerge in the next few weeks, the Bloomberg report said, quoting unidentified people.
Aurobindo’s spokesperson declined to comment on the deal.
“We do not want to comment on anything specific at this juncture, anything which fits our strategy we will always evaluate that," said N. Govindarajan, managing director of Aurobindo, in an earnings call on 31 May, answering to a query by an analyst on whether the company is considering to bid for Teva’s assets.
Several Indian companies are in the race to buy dozens of overlapping products that Teva had put up for sale to get regulatory approval for its $40.5 billion acquisition of Allergan’s generics business in the US and Europe.
In March, Teva won conditional European Union approval for the Allergan unit takeover after allaying regulators’ concerns with concessions, including the sale of “the great majority" of the subsidiary’s UK and Irish businesses.
In June, India’s second-largest drug maker, Dr Reddy’s Laboratories Ltd, agreed to buy a portfolio of eight abbreviated new drug applications (ANDAs) from Teva for $350 million, followed by Cadila Healthcare Ltd which acquired two ANDAs.
In November, Aurobindo said it will seek approval from its shareholders for an enabling resolution to raise up to $600 million through a combination of debt and equity, meant towards acquisitions and retiring a portion of debt.
Analysts said Aurobindo has experience in handling such acquisitions and raising debt is not going to be a problem.
“Their balance sheet can support such acquisition," said Sarabjit Kour Nangra, vice-president, research, pharma at Angel Broking Ltd.
Aurobindo has acquired loss-making commercial operations in seven Western European countries from Irish multinational drug maker Actavis Plc. for €30 million in January 2014, and was able to turn around successfully. Aurobindo acquired US-based nutraceutical company Natrol for $132.5 million, and was in the process of turning that company around.
Shares of Aurobindo were up 1.14% and were trading at ₹ 766 at 2.53pm, while the benchmark Sensex index declined 0.46% to 27,153.10 points.