Bloomberg News

Sun Is Open to Deals in Europe to Boost Scope, Makov Says

January 02, 2013

Sun Pharmaceutical Industries Ltd. (SUNP) is open to acquisition opportunities in Europe and globally as India’s largest drugmaker by value seeks to add products and extend its geographical reach, Chairman Israel Makov said.

“We can look at Europe, we can look at other areas of the world,” Makov, 73, said in an Dec. 31 interview at the Tel Aviv offices of his Bio Light Israeli Life Sciences Investments Ltd. (BOLT) “You know, you have a list of priorities, but eventually you have a list of opportunities too. While we may have geographical priorities, you naturally have a list of opportunities that come along the way.”

The drugmaker, which gets more than 80 percent of its sales from the U.S. and India, is looking for acquisitions in Europe including a possible takeover of German generic-drug maker Stada Arzneimittel AG (SAZ), people familiar with the matter said in August. Sun has sought to raise about $1 billion for a European deal and executives toured Europe to meet with potential targets, Bloomberg reported at the time. Makov declined to comment specifically on whether Sun is considering an acquisition of Stada, which is based in Bad Vilbel.

Stada’s shares gained 2.4 percent, the biggest gain since Dec. 19, to 24.95 euros in Frankfurt.

Sun has followed a strategy of acquiring under-performing or unprofitable companies and merging their operations into the Mumbai-based drugmaker. Sun bought controlling stakes in 10 companies in the past 14 years, including the acquisition of a majority stake in Israel’s Taro Pharmaceutical Industries Ltd. (TARO:US)

Specialty Focus

“The company would like to become a major global player in the specialty-pharma business,” said Makov, who as former chief executive officer of Teva Pharmaceutical Industries Ltd. (TEVA:US) helped turn that company into the world’s biggest generic-drug maker. “We are looking both for companies that will enhance our specialty-pharma focus and our geographical reach.”

Sun shares have risen 49 percent in the past year, giving the company a market value of 766 billion rupees ($14.1 billion).

Sun, which owns 61 percent of Taro, said Aug. 13 that it’s seeking to take the Yakum-based company private by buying the remaining shares at $39.50 apiece in a deal approved by Taro’s board. Minority shareholders voiced opposition to the deal, saying Taro is worth more. The stock has gained 21 percent since the August announcement to $49.49 as Taro said second-quarter sales rose 16 percent to $161 million.

“The company did better than expected, there is no question. But I don’t want to enter into the reasons for that,” Makov said. “There is a process to try to conclude the situation but I can’t go into the details.”

To contact the reporter on this story: David Wainer in Tel Aviv at dwainer3@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net


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Companies Mentioned

  • TARO
    (Taro Pharmaceutical Industries Ltd)
    • $106.46 USD
    • 1.55
    • 1.46%
  • TEVA
    (Teva Pharmaceutical Industries Ltd)
    • $50.85 USD
    • 0.94
    • 1.85%
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