Nicholas Piramal buys 40 p.c. stake in Rhone Poulenc

By Our Staff Correspondent

MUMBAI, DEC. 22. In one of the largest ever deals in the Indian Pharma industry, Nicholas Piramal India Ltd. (NPIL) today acquired a 40 per cent stake in Rhone Poulenc (India) Ltd. (RPIL) from Aventis Pharma, a global pharmaceutical branch of Aventis SA, at Rs. 875 per share for Rs. 157.50 crores.

The acquisition was made through NPIL's 100 per cent subsidiary NPIL Finvest Ltd. Up to 60 per cent of the shares of RPIL will be held in this company. NPIL will make an open offer to minority shareholders for an additional 20 per cent stake in RPIL at the same price. DSP Merrill Lynch advised NPIL on the transaction. NPIL Finvest will pay for the transaction through loan funds.

Under the terms of the agreement, RPIL's current brands in the Indian market are now licensed in perpetuity from Aventis Pharma to RPIL, both in the country and in some neighbouring countries. The company will have considerable flexibility in taking key decisions regarding the brands, including line extensions, composition and sourcing.

``RPIL has been well managed and there are considerable synergies between our existing businesses that, we are confident, can be leveraged to ensure strong growth. The company brings with itself a very strong portfolio of brands (including four among the top 300) as also a significant presence in therapeutic areas such as respiratory. The acquisition will also provide considerable career growth opportunities for employees of both companies.'' said Mr. Ajay Piramal, Chairman of Nicholas Piramal.

Mr. Piramal said that it was not yet decided whether the company would be merged with NPIL. ``It will take at least six months to understand what RPIL is all about. This is the largest pharmaceutical transaction in India.

Nicholas Piramal now emerges as the second largest pharmaceutical group in India as per ORG when assessed together with its joint ventures / subsidiaries.

Mr. Jerome Silvestre, vice president and general manager, South Asia, commercial operations, Aventis Pharma, said, ``I believe that the association between RPIL and Nicholas Piramal will create enhanced value for both companies. Nicholas Piramal's proposal maximised the primary objective of ensuring continued and rapid development of the company's business and also reflected appropriate attention to all stakeholder interests.''

This acquisition is another milestone in the relationship between NPIL and Aventis Pharma which began with the acquisition of the Hoechst Research Centres, followed by the acquisition of Haemaccel and Omnatax brands and the co-marketing arrangement for the new anti-diabetic molecule, Glimeperide.

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