Japan's Meiji acquires India drug maker, Temasek exits
Japanese conglomerate Meiji Holdings has acquired Medreich, an Indian pharmaceutical company backed by Singapore sovereign wealth fund Temasek Holdings, for $290 million via its subsidiary Meiji Seika Pharma.
According to a Tokyo Stock Exchange (TSE) disclosure, Meiji Seika will acquire all outstanding shares of Medreich held by its Indian promoters through Med Holdings and Nokha Holdings. Meiji will also buy shares from V-Sciences Investments, an investment vehicle of Temasek. The transaction will provide a full exit to Temasek which had invested just over INR1.09 billion (then $22 million) in Medreich in 2005 in return for a 25% stake.
Medreich develops a range of pharmaceutical preparations across categories such as cardiovascular, diabetes, anti-fungal, penicillins and respiratory. It has a client base across 54 countires and makes formulations for multinationals such as GSK, Pfizer, Sanofi Aventis, Wyeth,Adcock Ingram, Mylan and Actavis.
Meiji has interests across dairy products, nutritionals, confectionary and pharmaceuticals. Meiji Seika manufactures anti-infective drugs, therapeutic drugs for the central nervous system and generic drugs. Post acquisition, Medreich will be a subsidiary of Meiji Seika. The acquisition will help Meiji expand its generic drugs portfolio and gain a foothold in India. Meiji will also be able to leverage Medreich's geographical reach.
NM Rothschild and Sons advised Medreich on the transaction.
Meiji's acquisition of Medreich is not the first Japanese deal in Indian pharmaceutical sector. In 2008, Japan's Daiichi Sankyo acquired a 63.9% stake in Ranbaxy Laboratories for $4.2 billion. However this tuirned into a loss making deal for Daiichi after the US drug regulator Food and Drug Administration (FDA) pulled up Ranbaxy for poor compliance at its factories. Daiichi later agreed to exit the firm to Sun Pharmaceutical Industries in a $3.2 billion all-share deal.
According to research firm Lucintel, the generics drug market will reach $335 billion globally by 2017.
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