 "Aurobindo eyes Teva's product sale in Europe")
"Wait for some time," a senior management official of Aurobindo told Business Standard in response to a query on Tuesday's Bloomberg report, which stated that the company was among other players considering bids for Teva Pharmaceutical Industries Limited portfolio of drugs in the UK, Ireland and Iceland.
The official, however, refused to elaborate any further, though his crisp response makes Aurobindo's interest in Teva's product sale in Europe very clear.
Bloomberg report also said, quoting an unnamed source, that Aurobindo would finance the deal with a loan of more than $1 billion. No final decision has been made, and the company could still decide against a bid, same sources told the news agency.
Earlier this year Teva won a conditional European Commission approval for the takeover of Irish company Allergan after allaying regulators' concerns with concessions, including the sale of "the great majority" of the subsidiary's U.K. and Irish business.
Last year Teva signed a definitive agreement to acquire Allergan's generics Actavis business for $ 40 billion while agreeing to sell the overlapping products to comply with the anti-monopoly laws in the US and Europe.
In June, Dr Reddy's Laboratories announced the acquisition of eight such abbreviated new drug applications (ANDAs) from Teva for $350 million. Cadilla Healthcare acquired two ANDAs.
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In the race for buying Teva's European products on offer include big names like Maylan NV and Novartis AG among others according to the earlier reports. Incidentally Maylan resisted an earlier bid for acquisition by Teva.
Private equity firms including Apollo Global Management LLC and Cinven Ltd are also weighing bids for the business, which could fetch $1.5 billion to $2 billion, Bloomberg said quoting people in the know.
Aurobindo, which was able to stabilise the contribution of its European formulations business at around 22 per cent of its total revenues, is said to be betting on the European Commission 's preference for a strategic buyer with experience in the European generics market.
In 2015-16 Aurobindo achieved a revenue of Rs 3,130 crore from the formulations business in Europe, which is 28 percent of the total formulations business of of Rs 11,166 crore. Together with the API business the company had achieved a top line of Rs 13,896 crore in the last financial year. For Aurobindo, Europe is the second most important market after the US for the formulations as well as the
The company had got the highest number of product approvals from the USFDA last year as it has set out to achieve a target of $3 billion revenues by 2017-18. In May the company managing director N Govindarajan told analysts that he would not rule out capital raising for strategic purposes. Late last year the company had decided to seek shareholder approval for an enabling resolution to raise up to $600 million.
As at the end of March, 2016 the company has a gross debt of Rs 4,708 crore. However it has a cash balance of Rs 840 crore bringing down the net debt to marginally lower levels compared to the previous year. It had raised loans in the recent past to fund the acquisition of US-based nutraceutical company Natrol and Actavis Plc's loss making commercial operations in Europe.