Abbott onthe block
By Praveen Chandran | 24 Dec 2001
Mumbai: Ajay Piramal is at it again. The chief of Nicholas Piramal (NPIL) is believed to have initiated talks with the US-based Abbott Laboratories to acquire its Indian subsidiary, Abbott India.
While sources in the know say NPIL has evinced a keen interest in acquiring a 51 per cent stake in Abbott India, they add that it may also settle for Abbotts brands and other properties.
The US parent is reportedly exploring two possibilities — selling off its entire 51 per cent stake in Abbott India or else divesting its tail-ended products and manufacturing unit in Ankleshwar. Abbott's head office in Mumbai may also be up for grabs.
Abbot is however not keen to sell its two other core businesses in India — the nutritional and hospital products lines — and instead plans to integrate them with Knoll India, its other Indian subsidiary. Knoll India was acquired as part of Abbott's global takeover of Knoll Pharma from the Germany-headquartered BASF.
Industry sources say Abbott intends to drive its Indian business through Knoll Pharma, as it is a larger and more profitable outfit than Abbott India. NPIL is not the only bidder for Abbott India; the Delhi-based Pharmacia Upjohn is also believed to have initiated discussions with the US drug manufacturer for its Indian business.
Abbott India's tail-ended brands, like Surbex T, Erythrocin and Selsun are likely to be put on the block, while Claribid and other products introduced later will probably be retained. Abbott India officials refused to comment on the precise strategy.
Industry sources say other pharma majors may also make a pitch for the Abbott India stake. Ranbaxy, Wockhardt, Dr Reddy's, Morepen and Zydus Cadila are all likely contenders, as they have already chalked out big acquisition plans.
Abbott India has a paid-up capital of Rs 2.6 crore, comprising 52,19, 504 equity shares of Rs 5 each. At the prevailing market price of about Rs 148, its market capitalisation works out to Rs 76.7 crore. The market, thus, values a 51 per cent stake in Abbott India at about Rs 39 crore. It would be interesting to see how the deal finally pans out.