Report: Mylan in 'exclusive talks' with Strides
|Unichem's formulation plant in Ghaziabad, India--courtesy of Unichem|
Generic drugmaker Mylan ($MYL) is building up its Indian operation by spending $30 million to pick up a manufacturing plant from India's Unichem Laboratories. And perhaps because it is in the market shopping, reports have surfaced that it is in "exclusive talks" for Strides Arcolab's sterile injectables unit.
Sources are telling the Economic Times that there is a deal being negotiated for about $2 billion and that "senior" Mylan execs have been spending a lot of time in the country for negotiations. There have been other reports of high-level interest in Strides' injectables unit, and the Economic Times says that Pfizer ($PFE) and Novartis ($NVS) are also quite interested.
When talk first surfaced in August that Strides was looking to sell the unit, a price of $800 million was bantered about. But V. KrishnaKumar, a Mumbai-based M&A partner at Ernst & Young, quickly said it was worth at least $1.3 billion. He pointed out that sterile injectable deals tend to be expensive because the drugs are difficult to make and the expertise is specialized. Difficulties at Hospira ($HSP) and with some other injectables makers might also fatten the price. He suggested Pfizer and Hospira were likely candidates. The Bangalore-based Strides supplies injectable drugs to Pfizer, Novartis and GlaxoSmithKline ($GSK).
Neither Mylan nor Strides commented on the possibility. What is known for sure, Reuters reports, is that Mylan will pay 1.6 billion rupees ($29.7 million) for the Unichem plant in Central India.
- read the Reuters story
- here's the Economic Times story
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