Cipla Ltd on Thursday sweetened its offer by 17 per cent to take over South Africa's third-largest drug-maker, Cipla Medpro South Africa Ltd, ending the uncertainty of an earlier offer that had been put on hold by the Indian company.
Cipla, India's fifth-largest drug-maker by sales, said it would spend about $512 million, or 10 rand a share, to acquire Cipla Medpro and then delist the South African drugmaker.
The Indian company in November 2012 offered to buy 51 per cent of Cipla Medpro at 8.55 rand a share. After Cipla's initial offer, the South African company won a 1.4 billion rand government drug contract, leading analysts to revalue the African firm higher.
"With a 100 per cent buy-out plan, Cipla will have good operational synergies in the African market," said Siddhant Khandekar, an analyst at ICICI Direct in Mumbai.
"However, it is difficult to predict if the payback would happen quickly," he added.
Cipla chairman Y K Hemied told Reuters earlier this month that the November acquisition had been on hold, but did not give any reason. Cipla is the biggest supplier of drugs to Cipla Medpro.
Shares in Cipla were up 0.8 per cent at Rs 367.40 by 09:56 a.m. while the stock market was up 0.53 per cent.
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