Torrent Pharma readies €2 bn bid for Sanofi’s European unit

IF TORRENT PHARMA IS SUCCESSFUL, IT WILL BE THE BIGGEST OUTBOUND TRANSACTION BY AN INDIAN DRUG MAKER

MUMBAI: Torrent Pharmaceuticals Ltd is readying a €2 billion (₹16,000 crore) bid for Zentiva N V, the generic drugs unit of France’s Sanofi, two people directly aware of the bidding process said.

If Ahmedabad-based Torrent is successful, it will be the biggest outbound transaction by an Indian drug maker, the previous largest being Lupin Ltd’s acquisition of Gavis Pharmaceuticals Llc. and Novel Laboratories Inc. for $880 million in 2015.

Torrent Pharma has tied up funding from several domestic and foreign banks for the bid, the deadline for which ends on March 28, the people cited above said on condition of anonymity.

Sanofi had acquired Zentiva in 2009 by paying close to $2.6 billion for the company. Zentiva is currently the third largest generics company in Europe and sells medicines for cardiovascular, gastrointestinal, anti-inflammatory, pain management, metabolic and blood disorders among others. Zentiva has earnings before interest, tax, depreciation and amortisation (Ebitda) of $150 million. Torrent’s €2 billion bid will value the firm at 13 times its Ebitda, said one of the two people cited above, adding Sanofi has hired JP Morgan, Rothschild & Co. and Morgan Stanley as advisers to manage the sale process.

“More Indian pharma companies had submitted non-binding bids when the asset first came up for auction but their bids were not shortlisted,” said the second person cited above. “Apart from Torrent, a few more bidders have been shortlisted, which include a strategic bidder and private equity funds,” the second person said, adding that shortlisted bidders among PE firms are global giants Blackstone and Carlyle.

News agency Reuters reported in February that apart from Torrent, Brazilian drugmaker EMS has been shortlisted by Sanofi for Zentiva. Responding to a query, a spokesperson for Sanofi said “As announced in our 2020 strategic roadmap, Sanofi has carefully reviewed all options for its generics business in Europe and has decided to initiate a carve-out process in order to divest it by the end of 2018.”