Business
Lupin's managing director says there are some synergies and a lot of duplication between the two companies
Updated : Mar 19, 2018, 05:12 AM IST
Rs 7,855.09 crore – Wockhardt's market cap
Rs 56,645.49 crore-- Lupin's market cap
Pharma major Lupin, which has been scouting for companies in the domestic market that make a strategic fit, is said to have evaluated Wockhardt as a potential acquisition candidate.
According to a report by Bloomberg, Lupin managing director Nilesh Gupta said, "There are some synergies, and there's a lot of duplication with Lupin. We've certainly looked at it (Wockhardt). It doesn't hurt to always do that kind of analysis."
Gupta has earlier told dna that it will look at a company in India which will help Lupin to have access to areas where it doesn't have a presence. "In India, we would look at a regional player which has a presence in geographies where we are not strong in," he had said.
According to an industry source, Lupin is looking at a meaningful business and is evaluating Wockhardt among others as a potential candidate.
The company is well-positioned to look at assets such as Wockhardt at the moment, the source said. The source, however, said it does not look like Lupin and Wockhardt have initiated any discussions on the same. A Lupin spokesperson refused to comment on the matter.
According to the Bloomberg report, Wockhardt spokesperson "completely denies that it (Wockhardt) has any intention whatsoever to divest its business."
Gupta, while mentioning about the Sun-Ranbaxy deal, also said, "In many ways if you look at the Sun-Ranbaxy deal, at one level Sun is obviously paying top dollar, but they've added $2 billion to their revenues – it's pretty tough to add $2 billion to your revenues. From that perspective, I would personally find the Wockhardt deal interesting, but there really are no talks going on at all."
Sun Pharmaceuticals in April this year announced its plans to acquire Ranbaxy Laboratories from its present owner Japan-based Daiichi Sankyo in an all-stock deal at an enterprise value of $4 billion in order to expand the former's footprint in the emerging markets.
While Wockhardt's market capitalisation is about Rs 7,855.09 crore as on August 25, 2014, Lupin's market capitalisation is valued at Rs 56,645.49 crore.
According to a pharma analyst who did not want to be quoted, Wockhardt is a stressed asset but its portfolio can help Lupin if it is interested.
Going by its current price, any company which would be looking at Wockhardt would not have to pay a very high premium and can have the asset at a cheaper rate.