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Mumbai: Cipla Ltd said on Friday that it has signed a binding agreement with its existing foreign distribution partner, Biopharm SPA in Algeria, to form a joint venture company in that market.

The new joint venture, in which India’s second largest generic drug maker will hold 40% equity through its European subsidiary Cipla (EU) Ltd, will manufacture and market respiratory products for Algeria. The new company is expected to make an investment of up to $15 million to build a factory.

Cipla (EU)’s initial investment in cash in the joint venture is expected to be $6 million.

Cipla informed the stock exchanges on Friday that none of the people belonging to promoter or promoter group companies will have any interest in the transaction and it is not a related party transaction for the company.

The transaction is subject to execution of definitive agreement and applicable approvals.

The formation of the joint venture is part of Cipla’s strategy to create a global footprint through direct presence in the foreign markets, moving from its traditional business model of partnering with local companies to enter those locations. In this process the company has had acquired companies as well as formed subsidiaries in Europe, the US, South Africa and Sri Lanka in the past couple of years.

In an unrelated development, Cipla said on Friday that it has been awarded $188.95 million of Global Fund ARV (anti-retroviral) Tender as the Indian drug maker has been selected as a panel supplier. The contract is effective from 1 January and will run for three years. The supply of anti-HIV/Aids drugs under this tender will begin in the current quarter.

“We are extremely proud to have won this tender from Global Fund and this tender offers us a great opportunity to make HIV/AIDS treatment accessible to more than 140 countries," said Subhanu Saxena, managing director and global chief executive, Cipla.

Cipla has been associated with Global Fund since 2002 and has been one of the suppliers with a long-term contract for supplying anti-malarial drugs.

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