French drug maker Sanofi SA
is close to acquiring city-based Elder Pharmaceuticals, valuing the
pharmaceuticals company at about Rs 2,200 crore. The transaction is
expected to be closed in the next few weeks, said a banker close to the
development.
The Indian company’s recent default on interest payments of Rs 10 crore to debenture holders had expedited the talks for the sale, said a banker, on condition of anonymity. Its liabilities were close to the deal size and the company’s bankers were pushing for the deal so that it could repay the loans, the banker added.
When contacted, an Elder Pharma spokesperson declined to comment. A Sanofi spokesperson, too, refused to comment on what he termed “market speculation”.
Bankers say Sanofi has sent details of the deal and legal agreements to
Elder Pharma and the Indian company is now vetting the legal papers.
While the sale will give the promoters of the Indian company an
opportunity to cash out, it will help Sanofi deepen its penetration into
the $13-billion Indian pharmaceuticals market. Sanofi earned a third of
its revenues from emerging markets, including India, and was looking
for acquisition opportunities in emerging markets, its chief executive Chris Viehbacher had told reporters here on September 30 this year.
