Dr Reddy's pips Ranbaxy to acquire Betapharm

HYDERABAD: Dr Reddy's Laboratories (DRL) has outwitted Ranbaxy Laboratories Ltd's bid to acquire Betapharm, Germany's fourth largest generic company, for € 480 million.

Funding for the biggest acquisition in Indian pharmaceutical industry will be carried out through the Hyderabad-based firm's internal cash reserves and committed credit facilities.

The transaction to grab a 100 per cent stake in Betapharm is likely to be closed in the first week of March. However, financial terms and conditions were not revealed.

UK-based 3i, which took over the German firm last year, manages Betapharm.

Rothschild acted as financial advisors and Freshfields Bruckhaus Deringer acted as external legal counsel to Dr. Reddy's in the transaction.

“We see our investment in Betapharm as a key strategic initiative towards becoming a mid-sized global pharmaceutical company with strong presence in all key pharmaceutical markets. Betapharm has created a strong growth platform and is well positioned for the future and we are looking forward to partner with them in building a strategic presence in Europe,” said Anji Reddy, chairman, in Dr Reddy's statement.

“Betapharm has all the key elements for achieving success in the fast growing generics market in Germany. This strategic investment will generate substantial opportunities for long-term value creation for both the companies. The combination will enable Betapharm to continue to expand its growth trajectory and at the same time provide a strong foundation to leverage Dr. Reddy's global product development and marketing infrastructure to build a significant generics business in Europe in the long-term,'' said GV Prasad, vice-chairman and CEO of DRL.

Also in the race to pick up 3i's 80 per cent stake in Betapharm were France's Sanofi-Aventis and Israel's Teva.

Augsburg-based Betapharm markets high-quality generic drugs with focus on long-term therapy products with high prescription rates. Its current portfolio comprises about 145-marketed products.

Betapharm distributes high-quality generics. With around 150 active pharmaceutical ingredients, it covers major illnesses from common cold to serious cardiovascular diseases.

In 2004, Betapharm's turnover was reported at €161 million. The company's workforce stands at more than 350 people.