Adcock Ingram of South Africa has announced its intention to acquire the entire issued ordinary share capital of Cipla Medpro South Africa (CMSA) for a consideration of $228 million (2.125 billion rand). At 4.75 rand per share, this represents a premium of 36 per cent to CMSA’s closing share price on April 7.
CMSA is party to a long-term supply arrangement with Cipla India in relation to the pharmaceutical products developed by the latter.Adcock Ingram is South Africa’s second largest pharma firm after Aspen.
Adcock Ingram has partnership with Medreich for the past seven years and formed a manufacturing joint venture in Bangalore 18 months ago to make over-the-counter (OTC) products for the South African and African region. This partnership will not be impacted by this transaction, said a statement from Adcock Ingram.
There are clear benefits for Cipla India. These include access to a more robust and effective distribution partner with intrinsic capability to expand marketing and sales in SA and the rest of Africa.
Adcock has the capability to produce liquids at its facilities in South Africa which will maximise Cipla India’s product offering in that country.