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.

Author: Kebar Meztishakar
Country: Brunei Darussalam
Language: English (Spanish)
Genre: Science
Published (Last): 25 September 2016
Pages: 404
PDF File Size: 16.7 Mb
ePub File Size: 15.24 Mb
ISBN: 546-1-87520-910-8
Downloads: 24192
Price: Free* [*Free Regsitration Required]
Uploader: Tygojin

Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings. Mr Piramal did not say what he will do with the remaining money. My Saved Articles Sign in Sign up. Piramal Healthcare will retain its contract manufacturing, critical care, dsal drugs — all of which cumulatively generate Rs 1,crore revenues, but where margins are much lower.

Abbott has been operating in India for of its years, and has popular pharmaceutical brands including the antacid Digene and painkiller Brufen. Mumbai-based Piramal ceal it would consider paying a special dividend and would use deal proceeds to invest in pirakal remaining businesses and pay down debt.

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.

This is no different for Chinese firms.

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

Wharton management professor Saikat Chaudhuri says the relatively higher valuation makes sense for Abbott. Never miss a great news story! Sign up for the weekly Knowledge Valjation e-mail newsletter, offering business leaders cutting-edge research and ideas from Wharton faculty and other experts. Its other businesses include third-party manufacturing and pathology laboratories.


The chunk of Piramal Healthcare being sold has a 4. Globalization is not just for manufacturers. The earlier regime recognized patents on pharmaceutical processes but not on pharmaceutical products, allowing companies to reverse-engineer copies of the branded and patented drugs of western companies.

All abboyt same, the West continues to dominate pharmaceutical innovation, and companies in India and other emerging markets could play a supportive role, according to Danzon.

Abbott to pay 17K crore for Piramal generics business

The Indian unit of Abbott, which is a listed company, has a 2. But new Wharton research provides better insight into the benefits of PE buyouts. Abbott said it was advised by Morgan Stanley, while Piramal said it did not have a financial advisor on the deal. It is paying roughly 8.

Unlike other pirwmal acquisitions that have been targeted at buying Indian generic capacity to service Western and emerging markets, the Abbott-Piramal deal is primarily focused on the domestic market, according to Mumbai-based business magazine Business India.

Increased funding expands the scope for drug research, but that alone is not enough; other pieces have to fall in place, Piramal notes. The materialisation of this deal will also encourage buyers loosen their wallets.

A ‘Bigger Foothold’: What Does the Abbott-Piramal Deal Mean for Indian Pharma? – [email protected]

Abbott and other Big Pharma companies face the twin challenges of slow growth in the developed markets and maturing product pipelines that are getting harder to replenish with newer, blockbuster drugs, according to Chaudhuri. Chaudhuri acknowledges those new realities, but with a patriotic tinge. In fact, 10 days before the Piramal acquisition, Abbott announced a licensing and supply deal with Indian pharmaceutical company Zydus Cadila.


Log In or sign up to comment. Some said prices of medicines will go up. Sumeet ChatterjeeBharghavi Nagaraju.

Wharton professor of healthcare management Patricia Danzon agrees. On top of that, India is a growing market. Mexico, for example, is in the process of changing its regime to require generics to be bioequivalent, she says.

For consumers, the great value in generics is getting it cheaper. The Abbott-Piramal deal is the latest in a wave of consolidation within the global pharmaceutical industry over the past few years.

The potential to expand with very high priced specialty products is seriously limited.

You have to create a whole organization, and that takes time. NIFTY 50 10, Since then, further pharmaceutical deals have been expected, as global majors search for growth and low-cost production of generics, as patents on major branded drugs are set to expire.

By comparison, Cipla trades at about 4. 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.

Danzon adds that the emerging business plan for generics companies is essentially around selling to pharmacists, not physicians. But investors remain disappointed in the absence of an open offer. This will alert our moderators to take action.