Mumbai-based Elder Pharmaceuticals may be the next company to get snatched up by a Western drugmaker looking to expand into India. Elder, currently struggling amid competition and rising debts, is on the sales block, or so the rumors go.
Elder's advisers are now evaluating the company's assets so it can offer them to a potential buyer, two sources told The Economic Times. Ernst & Young and Japanese investment bank Nomura Securities are said to be managing the process to help Elder find a suitor. "Vendor due-diligence is on for the last two weeks … A clearer picture of potential buyers will emerge in the next 15 days," one of the sources said.
As the Times reports, Sanofi ($SNY), Pfizer ($PFE), GlaxoSmithKline ($GSK) and some Japanese companies may be in the mix for Elder. But the takeover target's managing director, Alok Saxena, told the news service "these are just market rumors." The ET also said prospective buyers could be looking at taking over certain brands--such as calcium supplement Shelcal--rather than the entire company, which execs think could be worth up to 3,000 crore, or about $5.12 billion.
A potential North American or European bidder for Elder could be following in the footsteps of other Western counterparts that have recently struck deals to penetrate India's emerging market. Last year, Hospira ($HSP) sealed a deal with Orchid Chemicals & Pharmaceuticals for an API plant in Aurangabad and a development operation in Chennai after picking up its sterile injectables business two years prior. And this February, Mylan ($MYL) paid $1.6 billion for Agila Specialties, the injectables unit of Bangalore-based Strides Arcolab.
- get The Economic Times story