| GV Prasad, vice-chairman and CEO, Dr Reddy's Laboratories, spoke to Business Standard on the acquisition. The excerpts: |
| How do you look at this investment when the company is trying to rationalise costs? |
| We are quite excited about our strategic investment in betapharm. With its differentiated business model, betapharm has all the key elements for success in the fast growing generics market in Germany. |
| We strongly believe that this strategic investment will generate substantial opportunities for long-term value-creation for both the companies. |
| What are the synergies from the deal? |
| This company has a wider product portfolio, which is coming readily available for our expected market expansion. betapharm also has a few more products in its development pipeline. Some of Dr Reddy's products in the pipeline will be taken forward through betapharm. |
| What are the terms and conditions of the transaction? |
| It is an all-cash deal, which will be funded from the company's cash reserves and through other available credit options. The transaction is expected to close in the first week of March 2006. |
| What are your funding plans? |
| We have Rs 900 crore in cash reserves, which will be fully utilised for this acquisition, and we will be raising another Euro 400 million through securities and other instruments. We have already raised some funds from bankers in loans for the immediate transaction requirements. |
| When do you expect returns on the investment? |
| We will look at the investment as a long-term capital investment to make Dr Reddy's a mid-size global company, rather than expecting a quick return on the overseas investment. |
| However, betapharm had posted a revenue of $200 million in 2005. The company has been registering an annual growth of 25 per cent, which will continue as there will not be any immediate plan to change the business model. |
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