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May 14, 2007

Globalization through acquisitions: Pharma cos. show the way

Habil Khorakiwala, Chairman, Wockhardt Group has an article in the Economic Times on how Indian pharmaceuticals are leading the way in creating global operations via the inorganic route.
The transition from being entirely domestic-centric to sprawling multinational corporations has taken merely a decade. Consider some of these facts. During the past couple of years, the Indian pharmaceutical companies were involved in almost two billion dollars worth of outbound M&A transactions, acquiring incremental sales of nearly a billion dollars.

... Since 2000, Indian pharmaceutical companies did 62 global acquisitions, which accounts for 20% of all M&As by Indian corporates. The pharmaceutical sector ranks next to only IT/ BPO sector in the number of transactions, and it has been responsible for setting the pace, starting as early as the nineties

... there is a fundamental difference in the M&A trend in other sectors compared to the pharma sector. In other sectors like steel, aluminium, automobile and software a handful of leading companies have been aggressively going for acquisitions. When it comes to the pharmaceutical sector, the acquisition urge is not limited to a few leaders but it is an all-pervasive trend characterising the entire industry. Some of the larger ones like Ranbaxy, Wockhardt, Dr Reddy’s, Nicholas Piramal, Sun Pharmaceuticals, etc, have each done four or more global transactions, gaining leadership position in many of these markets.


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.