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news.In a move that will boost its presence in Europe, Indian pharmaceutical company Dr Reddy's Laboratories has agreed to pay $570 million to acquire Betapharm, the fourth-largest generics drug maker in Germany.
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Having beaten off competition from Ranbaxy Laboratories, its Indian rival, Dr Reddy’s will acquire Betapharm from British private equity group 3i. Dr Reddy’s said that the acquisition would form part of a long-term plan to become a leading generics player in Europe.
Having been established in 1993, Betapharm currently holds a market share of around 3.5% in its domestic market. The German market is currently led by Novartis’ Sandoz unit which bought Hexal, the German drugs manufacturer, last year.
Dr Reddy’s expects the addition of Betapharm, which employs about 370 people and holds a product portfolio of just under 150 marketed products, to give it a platform to build a significant generics business in Europe. The agreed fee is almost triple the 2005 sales of Betapharm.
“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,” commented Dr Anji Reddy, chairman of Dr Reddy’s Laboratories.
The transaction will be funded using a combination of Dr Reddy’s internal cash reserves and committed credit facilities.