Active Stocks
Thu Feb 29 2024 15:49:54
  1. Kotak Mahindra Bank share price
  2. 1,690.80 0.43%
  1. Axis Bank share price
  2. 1,075.70 0.10%
  1. Tata Steel share price
  2. 140.90 0.11%
  1. Power Grid Corporation Of India share price
  2. 282.55 1.07%
  1. ITC share price
  2. 406.50 -0.51%
Business News/ Companies / Aurobindo Pharma scouts for acquisitions in Europe
BackBack

Aurobindo Pharma scouts for acquisitions in Europe

The Europe push comes amid Aurobindo's successful turnaround of the money-losing Western European commercial operations of Irish drug maker Actavis Plc

Aurobindo has shareholder approval to raise Rs2,100 crore through a sale of shares, which it intends to use for acquisitions. Photo: BloombergPremium
Aurobindo has shareholder approval to raise Rs2,100 crore through a sale of shares, which it intends to use for acquisitions. Photo: Bloomberg

Hyderabad: Aurobindo Pharma Ltd is scouting for acquisitions in Europe to gain a foothold in the market.

“I would not comment on the specifics, but as we had mentioned in the past also, it is predominantly two large areas—one is in terms of market expansion and one is in terms of newer platforms in terms of technology," managing director N. Govindarajan told analysts in a conference call on 16 November.

“From a market expansion perspective, if we really look at opportunities across the globe, it would be more in Europe than in the US for a simple reason that our pipeline is so strong in the US. As far as Europe is concerned, we would like to really look at something having better margin because it will improve our overall European Ebitda (earnings before interest, tax, depreciation and amortization," Govindarajan said.

The Europe push comes amid Aurobindo’s successful turnaround of the money-losing Western European commercial operations of Irish drug maker Actavis Plc, which it bought for €30 million in 2014.

Aurobindo ended 2015-16 Rs13,896 crore revenue, of which Europe contributed about 23%—Rs3,130 crore.

The Economic Times on 3 November reported that Aurobindo had expressed preliminary interest in acquiring Portuguese drug maker Generis Farmaceutica for about $200 million.

Generis makes anti-infective, respiratory, anti-diabetes and dermatology drugs, besides a contract manufacturing and analytical services arm. It generated sales of around $60 million last year.

Phone calls and emails to a spokesperson for Aurobindo did not elicit a response.

Aurobindo was also in the race to acquire Israel-based Teva Pharmaceutical Industries Ltd’s UK assets, but was outbid by Ahmedabad-based Intas Pharmaceuticals Ltd.

Aurobindo has shareholder approval to raise Rs2,100 crore through a sale of shares, which it intends to use for acquisitions.

Analysts say buyouts in Europe makes sense as Aurobindo has been building dedicated plants in India to source drugs for its Western European generics business.

“Inorganic expansion in Europe helps Aurobindo to quickly ramp up its sales and margins, as the company is well integrated with robust low-cost manufacturing base in India," said an analyst who didn’t want to be named, citing company policy.

The company is spending about Rs900 crore as part of its capital expansion—that includes an oral finished dosage facility for European markets in Visakhapatnam, Andhra Pradesh.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 25 Nov 2016, 12:19 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App