Torrent Pharmaceutical, one of India’s leading pharmaceutical companies, is – as first reported by Reuters – in preliminary talks with Apollo Global Management to secure a loan of up to $1 billion. The loan would be used to help fund a planned bid for Torrent’s much larger rival, Cipla.
Torrent is hoping to secure roughly $3 billion to $4 billion in financing for the bid, according to sources familiar with the matter.
Photo by Irwan @blogcious
Cipla is a multinational pharmaceutical company headquartered in Mumbai, India. It is one of the largest generic drug manufacturers in the world, with a presence in over 80 countries.
The company has a market capitalization of around $9 billion. Torrent, on the other hand, is a much smaller player in the industry, with a market capitalization of around $5 billion.
Apollo Global Management is a New York-based private equity firm with over $455 billion in assets under management. The firm has a long history of investing in the healthcare industry, and has been involved in a number of high-profile deals in recent years. If the deal goes through, it would be one of the largest loans ever made to an Indian pharmaceutical company.
Background of Torrent Pharma and Cipla
History and Market Presence of Torrent Pharma
Torrent Pharmaceuticals is one of India’s leading pharmaceutical companies, with a market capitalization of around $12.5 billion. The company was founded in 1959 by U.N. Mehta and has since grown to become one of India’s largest pharmaceutical companies. Torrent Pharma has a strong presence in the respiratory, diabetes, pain management, and oncology segments.
Torrent Pharma is also known for its Asia strategy, which has helped the company expand its presence in the region. The company has a 33.4% holding in its sister company, Torrent Cables, which is listed on the Bombay Stock Exchange.
Cipla’s Profile and Product Portfolio
Cipla is India’s third-largest drugmaker, with a market capitalization of around $9.7 billion. The company was founded in 1935 by Khwaja Abdul Hamied and has since grown to become one of India’s leading pharmaceutical companies. Cipla is known for its respiratory drugs, diabetes, pain management, and oncology products.
Cipla has a strong presence in the Indian market and has been expanding its presence in international markets. The company has a presence in over 80 countries and has been focusing on expanding its product portfolio in the US market.
Apollo’s Role in the Pharma Sector
Apollo Global Management is a leading private equity firm with a strong presence in the healthcare sector. The firm has been investing in the healthcare sector for over two decades and has made several investments in the pharmaceutical industry.
Apollo has been actively investing in the Indian market and has been looking to expand its presence in the country. The firm has been investing in the healthcare sector in India through its equity partners and consortium.
The Consortium and Its Stakeholders
The consortium that is in talks with Torrent Pharma includes Apollo Global Management, equity partners, and other investors. The consortium is looking to secure a loan of up to $1 billion to help fund the planned bid for Cipla.
The equity partners and other investors in the consortium have not been disclosed, but it is believed that CVC Capital Partners and Bain Capital are also in talks with Torrent Pharma to raise up to $1.5 billion.
Financing the Deal
The consortium is looking to secure financing for the deal through a combination of credit from foreign banks and financing from Indian banks. Morgan Stanley and Barclays are reportedly among the foreign banks that are being considered for the financing.
Regulations and Legal Considerations
The deal will be subject to Indian regulations and legal considerations, and the consortium will need to secure regulatory approvals before the deal can be completed.
Market Implications
If the deal goes through, it will have significant implications for the Indian pharmaceutical market. The deal will create a new entity that will be one of the largest pharmaceutical companies in India, with a market capitalization of over $22 billion.
The new entity will be a major player in the Indian pharmaceutical market, competing with global majors such as Pfizer and Abbott.
Analysts’ View and Predictions
Analysts have been closely following the developments around the deal. Bernstein analysts have predicted that the deal could be a game-changer for the Indian pharmaceutical industry, with the new entity becoming a dominant player in the market.
Potential Impact on the Healthcare Industry
The deal could also have a significant impact on the healthcare industry in India. The new entity will have a strong presence in the respiratory, diabetes, pain management, and oncology segments, which are key areas of focus for the Indian healthcare industry.
Conclusion
The talks between Torrent Pharma and the consortium led by Apollo Global Management are still in the preliminary stages, and it remains to be seen whether the deal will go through. However, if the deal does go through, it will create a new entity that will be a major player in the Indian pharmaceutical market, with significant implications for the industry and the healthcare sector in India.
