Bethel Finance: Teva eyes $2b Indian acquisition - report

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Bethel Finance news:
The fact that Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) has explicitly said that it has no plans to make large acquisitions any time soon has not stopped speculations about the company's next buyout. Indian website "VCCircle" reports that Teva is a contender to acquire Micro Labs Ltd. for almost $2 billion. While the amount is not on the scale of Teva's last three multibillion takeovers of Cephalon, ratiopharm, and Barr Pharmaceuticals, it is not a small amount either.

"VCCircle" says that Pfizer Inc. (NYSE: PFE; LSE: PFZ), private equity buyout firms are eyeing Bangalore-based private branded generics manufacturer Micro Labs. The company produces tablets and intravenous drugs for a range of medical fields. The company had a net profit of $45 million on $280 million revenue in the year through March 2011.

Teva informed "VCCircle" in response by e-mail, "Teva does not comment on market rumours in regards to its M&A activities." Micro Labs CEO Dilip Surana said, "No such talks are going on."

Micro Labs is planning to expand into the UK, the US, Canada, South Africa and Japan. "VCCircle" said that if a deal materializes, it would mean another exit by an Indian drug company, following the acquisition of a majority stake in Ranbaxy Laboratories Ltd. (BSE: 500359) by Daiichi Sankyo Ltd. (TSE: 4568) a multi-billion-dollar deal three years ago, and the acquisition of domestic formulations business of Piramal Healthcare Ltd. (BSE: 500302) by Abbott Laboratories Inc. (NYSE: ABT) for $3 billion.

Mr. Peres Sailam (Bethel Finance Ltd) says, "Such blockbuster deals, which gave away the control of large Indian pharma companies to global firms, had even called for putting a ceiling on foreign direct investment in the pharma industry. However, no such regulatory clamps have been put by the Indian government.

"For global firms, Micro Labs could be yet another opening to expand into or enter the Indian pharma market which has been consistently growing in the 15-20% annually. According to IMAP’s Pharma & Biotech Industry Global Report 2011, Brazil, Russia and India belong to the tier II of so called ‘pharmerging’ markets and each is expected to add $5-15 billion to the pharmaceutical market through 2013."

Teva's share price fell 2.6% by mid-afternoon on the TASE today to NIS 168.30, after falling 1.2% on Nasdaq on Friday to $44.91, giving a market cap of $39.7 billion.