Saturday, February 3, 2007

Cipla joins hands with PE funds for Merck generics bid

Indian pharma major Cipla is teaming up with private equity funds to work out an innovative financing model for bidding for Merck’s generic business. While the acquisition will be funded by PE funds, Cipla will assume key management responsibilities of the generic division if the consortium wins the bid. The domestic drug major will get a percentage of the profits as a management contract fee and will also have the option of gradually increasing its stake in the generic business. Unconfirmed reports say that Cipla would annually get about 20% of the profits from Merck’s generics business and 2% additional stake every year. The name of the PE firms that Cipla is tying up with has not been disclosed yet.

Read more in The Economic Times article.

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