US firm eyes Sekhsaria Chemicals

ACQUISITIONS AND BUYOUTS GAINS GROUND

Watson Pharmaceuticals Inc, the third-largest pharmaceuticals company in the US, is all set to acquire a leading active pharma ingredients (API) development and manufacturing company in the country.

Industry sources said the seller could be Mumbai-based Sekhsaria Chemicals. They added that the acquisition of the $1.65 billion foreign company would involve Sekhsaria Chemical's manufacturing plants located at Dombivili and Ambernath near Mumbai and its expertise in development and manufacturing of selected APIs.

A source close to the development said, Watson had entered into a definitive agreement with Seksaria Chemicals for the same. "The terms of the definitive agreement, which is subject to certain conditions to closing, are confidential," the sources added

S K Aggarwal, vice-chairman, Sekhsaria Chemicals, was not available for comments. Sekhsaria Chemicals, a closely held company, had registered revenues of Rs 30 crore last year. The company operates a US Food and Drug Administration approved API manufacturing facility.

Sekhsaria has two API manufacturing sites capable of a wide range of chemical reactions. In addition to the API facilities, Sekhsaria also has a world-class formulation development site. This site allows Sekhsaria to offer finished dose development to customers around the globe.

Sources close to Watson said it planned to establish a generic product development centre in India. Last month, Watson had acquired Andrx Corporation for $1.9 billion, making it the third-largest US generic pharmaceutical company.

During the fourth quarter of the financial year 2005, Watson acquired Dr Reddy's Lab's manufacturing facility located in Goa, which produces solid dosage generic products for the US market.

It had also increased investments in an FDA approved Chinese company specializing in manufacture of active pharmaceutical ingredients.

The acquisitions is believed to be part of Watson's strategy to expand its product development and manufacturing capabilities in Asia.

Industry analysts feel these steps now will help Watson maintain a competitive cost base, while continuing to provide a broad portfolio of quality products to its customers.

Watson is a leading specialty pharmaceutical company that develops, manufactures, markets and distributes branded and generic pharmaceutical products.

Watson currently markets numerous brand product lines including several that hold leading market positions. With more than a dozen brand products in various stages of development.