Piramal deal will give Abbott India size Piramal, who is the chairman of Piramal Healthcare, said “the valuation of about nine times shows the. It took four hours for Ajay Piramal to negotiate a whopping $ billion valuation for his generics business with Abbott. Just how did he pull it off. Abbott to pay $ billion for unit of India’s Piramal Disagreements over valuation have prevented more deals from getting done. Abbott.

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It is paying roughly 8.

On top of that, India is a growing market. Additional Reading Management Finding the Virtue in Private Equity Firms Many view private equity firms as villainous actors intent on the singular goal of profit. Mr Piramal said he would pay a special dividend and pare debt, but otherwise declined to say much on how he planned to piramap the bonanza.

Drag according to your convenience. By comparison, Cipla trades at about 4.

The Indian unit of Abbott, which is a listed company, has a 2. Wharton management professor Saikat Chaudhuri says the relatively higher valuation makes sense for Abbott. Your Reason has been Reported to the admin. Shares in Mumbai-based Valuztion closed Sumeet ChatterjeeBharghavi Nagaraju.

Abbott to pay 17K crore for Piramal generics business

In the past few years, they have realized that those pipelines are running dry, and are trying to diversify. Increased funding expands the scope for drug research, but that alone is not enough; other pieces have to fall in place, Piramal notes. Disagreements over valuation have prevented more deals from getting done.

As a global MNC, Abbott does. The Abbott-Piramal deal is the latest in a wave of consolidation within the global pharmaceutical industry over the past few years. A key differentiator here is that unlike in the U. This will alert our moderators to take action Name Reason for reporting: The potential to expand with very high priced specialty products is seriously limited.


Log In or sign up to comment. Mexico, for example, is in the process of changing its regime to require generics to be bioequivalent, she says.

All the same, the West continues to dominate pharmaceutical innovation, and companies in India and other emerging markets could play a supportive role, according to Danzon. India certainly offers a large and growing domestic market with rising incomes and increasing health insurance coverage, says Danzon. It is not so much a concern about the downside, but about how we maximize the opportunity. Mr Piramal did not say what he will do with the remaining money.

Will be displayed Will not be displayed Will be displayed. That is one reason pharmaceutical multinationals are doing deals with the relatively small number of well established Indian companies that have met international standards in manufacturing. Mumbai-based Piramal said it would consider paying a special dividend and would use deal proceeds to invest in its remaining businesses and pay down debt. Food and Drug Administration said in February Ranbaxy sold misbranded or adulterated drugs in the United States, its largest market, having earlier banned imports of over 30 generic drugs from the firm.

In fact, 10 days before the Piramal acquisition, Abbott announced a licensing and supply deal with Indian pharmaceutical company Zydus Cadila. L as possible buyers.

Seven years after Piramal deal, Abbott way off revenue target | Business Standard News

It makes a lot of sense if they can pull off all the integration issues. This is no different for Chinese firms. Sign up for the weekly Knowledge Wharton e-mail newsletter, offering business leaders cutting-edge research and ideas from Wharton faculty and other experts.

But new Wharton research provides better insight into the benefits of PE buyouts. Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings. According to Wharton faculty and industry experts, changing global business models and the resources needed to develop blockbuster drugs are propelling Indian companies to join forces with multinationals through strategic alliances or as targets for acquisitions.


Danzon adds that the emerging business plan for generics companies is essentially around selling to pharmacists, not physicians. However, companies like Abbott and others getting into new generic drug markets must be watchful of the changing lay of the land there as well, according to Danzon.

BOthe U. But investors remain disappointed in the absence of an open offer. There is intense speculation that Mr Piramal will buy companies in some of these segments. The stigma of selling—that has been holding back promoters of Indian pharmaceutical companies—is gone after two large lucrative deals in the sector, said an investment banker who asked not to be named.

The Abbott-Piramal combine reports to him, but he notes it will be run as a standalone business unit after the merger takes effect later this year. Industry forecaster IMS Health predicts leading emerging markets will show annual pharmaceuticals sales growth of 14 to 17 percent throughagainst just 3 to 6 percent a year for developed markets.

Country Garden, one of the largest and most successful vertically integrated real estate[…]. Get instant notifications from Economic Times Allow Not now. Based in Abbott Park, Ill. The chunk of Piramal Healthcare being sold has a 4. As part of the deal, around 5, Piramal employees and one manufacturing facility in Baddi, Himachal Pradesh will be transferred to Abbott. Innovation From Book to Bank: Expensive legal battles with patent holders, higher regulatory scrutiny after charges of poor manufacturing quality, and increased competition in the generics space have compelled Indian pharmaceuticals firms to look for buyers.

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