Fast-growing Sun Pharma eyes $5B deal for Sweden's Meda

For years, foreign companies have been buying up companies in India to gain access to the emerging market. But India's Sun Pharmaceutical Industries is looking to turn that trend on its head. The company is in talks to acquire Swedish drugmaker Meda AB in a deal that could be worth almost $5 billion, The Wall Street Journal reports.

According to WSJ sources, Sun has been working with banks to arrange financing for the potential acquisition. And to win over Meda's board and persuade directors it can seal the deal, India's largest drugmaker is looking for letters of credit from those banks to prove their backing.

Meda has been attracting buyout interest for a couple of years as drugmakers look to fill product lines depleted by the patent cliff. Valeant Pharmaceuticals reportedly made a foray in 2011, and Japan's Takeda was said to be shopping there last year. But Stena, a shipping company owned by Sweden's Olsson family, owns about a fifth of Meda's shares, the WSJ points out, and would have to be convinced to sell.

The acquisition of Meda would fit right in with Sun's U.S. sales tack. The Mumbai-based company announced Wednesday that net profit rose 23% to 10.12 billion rupees ($182 million) for Q4, largely on growth in the U.S., and it expects revenue growth of 18-20% for the current fiscal year. The sales boost stems from Sun's buyout of Takeda's U.S. generics unit, which increased the company's presence in the States. Meda's branded generics business would beef up Sun's U.S. business even further, the WSJ notes.

The WSJ estimates that Meda, which specializes in respiratory, cardiology, dermatology and pain and inflammation drugs, could be worth between $4.5 billion and $5 billion. Its sales amounted to 12.99 billion Swedish kronor in 2012, Bloomberg reports. Besides branded generics, the company has a line-up of over-the-counter products, and a stable of specialty meds, including the recently approved allergy fighter Dymista, expected to bring in $333 million by 2016.

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Special Report: Sun Pharmaceutical Industries - Top 11 Fastest-Growing Generics Companies

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