Indian drug firm Sun Pharma will acquire an 85.1% stake in Russian company JSC Biosintez for $24 million (Rs 160 crore approximately). The company issued a statement on Wednesday saying that it has signed the definitive agreements for the acquisition.
As part of this agreement, the drug major will also assume a debt of around $36 million (Rs 239 crore approximately) from the Russian firm. The entire transaction, worth $60 million (Rs 400 crore approximately), is likely to be completed by the end of this year. However, it needs to be approved by the Russian Federal Anti-Monopoly Service, reported IANS.
“This acquisition is consistent with Sun Pharma’s philosophy to invest in strategic emerging markets. This transaction gives us access to local manufacturing capability across multiple dosage forms in Russia, enabling us to serve the Russia pharmaceutical market more effectively,” said Aalok Shanghvi, Head of Emerging Markets at Sun Pharma.
JSC Biosintez is a Russian pharmaceutical major that manufactures and markets pharmaceutical products with its primary focus on the hospital segment. Apart from medicines, tablets and ointment, the firm manufactures pharmaceuticals for injections, blood substitutes, blood preservatives also. It has a manufacturing facility in Penza region. In 2015, the company’s annual revenue was $52 million (Rs 346 crore approximately).
Russia is one of the many countries where Sun Pharma is interested in growing its business. Ranjit Kapadia, senior Vice President at Centrum Broking, told Mint that this is a “small” acquisition for a firm like Sun Pharma. “This [acquisition] will increase the company’s presence in Russia and help in meeting future regulatory requirements in that market.” Kapradia, however, warned that “sharp currency fluctuations” make Russia a challenging market.