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Singapore: Serum Institute of India Ltd, Asia’s largest vaccine maker, will look at a possible merger with generic drug maker Cipla Ltd if the European venture between the two companies succeeds.

“If it’s successful, then the merger makes sense, because then we’d be selling as well as manufacturing here, so it’d make a lot of sense," Serum’s billionaire chairman Cyrus Poonawalla said in an interview in his Pune, India headquarters. “We won’t want to make a merger which could end up into nothing."

Cipla was founded in 1935 by scientist Khwaja Abdul Hamied, and made its name selling generic HIV therapies in Africa. It now has a market capitalization of about $8.7 billion. Serum, owned by Poonawalla, makes vaccines injected into 65% of the world’s children.

Serum would want a majority stake in any combined entity as its profit is already a third more, Poonawalla said. “It’ll all depend on, after a few years, where his company stands. Cipla-Serum talks are not significant at the moment."

Serum held preliminary discussions with Cipla on a merger, Poonawalla had said in interview with CNBC-TV18 earlier this year.

The companies struck a distribution agreement for affordable pediatric vaccines in Europe, Cipla said in a statement on 20 November. Calls and e-mails to Cipla representatives weren’t immediately answered. The partnership is at a nascent stage, and the companies are working together to introduce products in Europe first and then US, said Poonawalla.

Cipla’s owners had a 36.8% stake in the generic drug maker as of March, according to stock-exchange filings. Serum is entirely owned by Poonawalla, who has a fortune of $5.2 billion, according to the Bloomberg Billionaires Index.

Cipla had revenue of 10,100 crore in the fiscal year ended March 2014, and net income of 1,380 crore, data compiled by Bloomberg show. Serum had net profit of $291 million on revenue of $592 million in the fiscal year ended March 2014, according to Poonawalla. Bloomberg

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