Sun Pharma to increase holdings in Caraco to 60 per cent

Chennai: The Mumbai-based speciality drugs manufacturer, Sun Pharmaceutical Industries, has signed an agreement with two large shareholders of the US-based Caraco Pharmaceutical Laboratories to acquire most of their common stock and options in the company. The agreement was finalised in the third week of January 2004.

This will increase the equity holding of the company and its affiliates in Sun Pharmaceuticals to over 60 per cent from 44 per cent on a fully diluted basis including options. This stock acquisition will cost Sun Pharmceuticals approximmately $42 million, which works out to $9 per share/option. The company will fund this acquisition from its internal accruals.

The Sun Pharma board, in its meeting on January 28,2004, cleared this investment to strengthen the company''s base in the high priority US generics market. The requisite permission for these investments have been obtained.

"We view this as a firm intent of our long term interest in the US generic market, the potential that we see there and the capability of the management at Caraco to partake of this growth", said Sun Pharma''s chairman and managing director, Dilip Shanghvi.

Situated in Detroit, Caraco Pharmaceutical develops, manufactures and distributes generic and private-label prescription drugs to some of the largest wholesalers, distributors, drugstore chains, healthcare systems and state and federal agencies in the US.