Davos: After six global acquisitions last year, India's Ranbaxy Laboratories has entered the market again to acquire the generic drugs business of German pharmaceuticals major Merck in a deal estimated at over $5 billion.
'We are in talks with private equity funds to finance the deal,' Ranbaxy's chief executive Malvinder Singh said on the margins of the annual meeting of the World Economic Forum (WEF) here. 'We are being hounded by them for the takeover.'
According to Singh, the due diligence for the acquisition was expected to start next month. He, however, declined to give any financial details.
'Merck makes sense for us since it would result in a major gain for us in the global generics business and a strategic fit for our activities,' Singh said, adding: 'I have been talking to some private equity funds even here.'
According to pharmaceutical industry sources, Merck's generics business records annual revenues around $2.5 billion and has the potential to more than triple Ranbaxy's turnover to around $3.75 billion after the acquisition.
The merger of Ranbaxy and Merck's generics business could result in a stable of 100 products in the US alone for drugs in diabetics, neurology, cardiovascular and neurology, among other areas.
The generics unit of the German major is the largest supplier in markets like Australia, France and Scandinavia.
Ranbaxy had acquired four companies in Europe last year, including Terapia of Romania, for $324-million. The company has approval from shareholders to sell bonds and shares worth $1.5 billion.