Mumbai: Ranbaxy Laboratories. has opted out its bid for the generic drug unit of German pharmaceutical company Merck KGaA, as it found it to be overvalued, reports quoting sources close to the deal said.
Ranbaxy had entered the second phase of bidding for the generic drug-manufacturing arm of Merck KGaA, but withdrew from the race because of high valuations of the takeover target.
Ranbaxy and Merck, however, declined to comment.
Valuation of the Merck unit has varied from around $4-5 billion to $6-7 billion as the bidding progressed.
Ranbaxy had not disclosed its bid figure. However, chief executive Malvinder Singh had earlier said the company would not get into a bidding war even though it deemed Merck's generic arm as a quality asset.
Ranbaxy has been aggressively acquiring companies overseas, especially in Europe, to become a global player in generic drugs. Last year, the company bought three European firms, including Terapia of Romania for $324 million.
Acquisition of Merck's generic business would have made Ranbaxy the third-largest drug maker after Teva Pharmaceuticals of Israel and Sandoz, the generic arm of Swiss major Novartis.
Merck, founded as an apothecary in Darmstadt, Germany in 1668, is the oldest pharmaceutical business in the world. It has been entirely separate from New Jersey-based Merck & Co. since the end of World War I and employs some 29,000 people worldwide.
Ranbaxy shares rose 6.2 per cent to Rs336.35 on the Bombay Stock Exchange after the company opted out of the deal.