The British subsidiary of Indian drug major Cipla Ltd has acquired 51% equity stake in Uganda-based Quality Chemicals Ltd for $30 million (Rs.191 crore) in tranches from its current shareholders. As per the agreement that both companies signed on Thursday, Cipla (EU) Ltd will pay $8 million (Rs.51 crore) upfront and the balance amount of Rs.140 crore in five equal installments of $4.41 million annually to the shareholders. This transaction is expected to be completed by July.
The 18-year-old Kampala-based Quality Chemicals Ltd imports and distributes pharmaceutical and consumer products in the east African nation. Quality also holds 22% equity stake in another Cipla subsidiary in Uganda - Cipla Quality Chemical Industries Ltd.
The company said in a regulatory filing to the Bombay Stock Exchange (BSE), "Post acquisition, our stake in the Ugandan subsidiary will increase to 62.3% from 51.05% and strengthen our presence in the African market."
Quality's turnover declined to Ugandan shilling 14.85 (approximately $4.98 million) billion in calendar year 2014 from 17.02 billion in 2013.