Ranbaxy in race for Betapharm

Puts in Rs 2,800cr bid for Germany's 4th largest generic firm.

The country's largest pharmaceutical company, Ranbaxy Laboratories Ltd, is believed to have put in a bid of €500 million (approximately Rs 2,800 crore) for Germany's fourth largest generic company, Betapharm Arzeniemittel GmbH.

This is €50 million more than the bid of €450 million made by Dr Reddy's Laboratories.

There are two other companies in the fray: Teva and Sanofi-Aventis. Confirming the development, investment banking sources said the UK-based 3i Group, which had put Betapharm up for sale nearly three months ago, was expected to seal the deal in the next 10 days.

A Ranbaxy spokesperson refused to comment on the issue saying, "As a policy, we do not comment on speculations."

Industry analysts said it was for the first time that two Indian companies had emerged front-runners for a high-value overseas pharmaceutical company. If the deal materialises, it would be the largest ever overseas acquisition by an Indian company in the pharmaceutical space.

Ranbaxy had obtained the shareholders' approvals to raise funds up to $1.5 billion in October 2005. However, the instrument of the proposed fund raising was not fixed.

Sources close to Ranbaxy said it was an enabling resolution that the company wanted the shareholders to pass so that it could fund its inorganic expansion, whenever needed. They added that Ranbaxy planned inorganic expansion in Europe and the US, besides India.

Betapharm, the fourth largest generic pharmaceutical company in Germany, commands nearly 5.3 per cent share of the €27 billion German pharmaceutical market. The company had reported a total sales of Euro 174 million in September 2005.

In 2004, 3i Group acquired it for €300 million. In response to a media query by a news agency last week regarding reports of Dr Reddy's Lab's bid for Betapharm at Euro 450 million, a 3i Group spokesperson had said, "We have received several offers for Betapharm. We do not want to say anything about which companies have shown interest and which price has been given."