Ranbaxy Laboratories is considering using the frequently-employed technique of taking the special purpose vehicle (SPV) route for launching a bid on Merck’s generic business. If Ranbaxy decides to take the SPV route, the debt and private equity funds as well as Ranbaxy’s own funds will be infused into the SPV.
Merck is looking to sell its generics division, in a deal that could be valued at $5.2 bn. The generics business clocks revenues of around $2.5 bn and if Ranbaxy is able to acquire it, the Indian company’s revenues could nearly triple to around $3.8 bn (See Related Post). The bidding process and due diligence are expected to begin in February. Leading generic companies such as Teva and Sandoz and private equity majors such as Blackstone and KKR could be in the race as well. Ranbaxy has in the past secured shareholders approval to raise $1.5 bn out of which it has already raised $440 mn through FCCBs. Ranbaxy has also taken a 14.9% stake in Hyderabad-based Krebs Biochemicals and Industries for around Rs. 9 crores (See Related Post).
Read the article in The Economic Times.
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