Piramal deal will give Abbott India size Piramal, who is the chairman of Piramal Healthcare, said “the valuation of about nine times shows the. It took four hours for Ajay Piramal to negotiate a whopping $ billion valuation for his generics business with Abbott. Just how did he pull it off. Abbott to pay $ billion for unit of India’s Piramal Disagreements over valuation have prevented more deals from getting done. Abbott.

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This will alert our moderators to take action. Sumeet ChatterjeeBharghavi Nagaraju. Read more on Piramal. By comparison, Cipla trades at about 4. The Abbott-Piramal combine reports to him, but deeal notes it will be run as a standalone business unit after the merger takes effect later this year.

Additional Reading Management Finding the Pirqmal in Private Equity Firms Many view private equity firms as villainous actors intent on the singular goal of profit. All the same, the West continues to dominate pharmaceutical innovation, and companies in India and other emerging markets could play a supportive role, according to Danzon. Mumbai-based Piramal said it would consider paying a special dividend and would use deal proceeds to invest in its remaining businesses and pay down debt.

Abbott and other Big Pharma companies face the twin challenges of slow growth in the developed markets and maturing product pipelines that are getting harder to replenish with newer, blockbuster drugs, according to Chaudhuri. Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings.

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It makes a lot of sense if they can pull off all the integration issues. Find this comment offensive? Danzon adds that the emerging business plan for generics companies is essentially around selling to pharmacists, not physicians.

Foul language Slanderous Inciting hatred against a certain community Others. Indian companies can hope to become truly global pharmaceutical companies only through drug discovery, says Piramal.

Abbott to pay $ billion for unit of India’s Piramal | Reuters

There are a limited number of Indian generics companies that are attractive, and there might be considerable competition for them. Yet, Piramal investors are disappointed. Danzon points to Dr. Choose your reason below and click on the Report button. The stigma of selling—that has been holding back promoters of Indian pharmaceutical companies—is gone after two large lucrative deals in the sector, said an investment banker who asked not to be named.

It allows Abbott to commercialize two dozen Zydus Cadila drugs in 15 emerging markets.

Seven years after Piramal deal, Abbott way off revenue target | Business Standard News

However, companies like Abbott and others getting into new generic drug markets must be watchful of the changing lay of the land there as well, according to Danzon. Wharton management professor Saikat Chaudhuri says the relatively higher valuation makes sense for Abbott. To see your saved stories, click on link hightlighted in bold.

Growth Through Overseas Expansion Globalization is not just for manufacturers. Food and Drug Administration charged the Indian company with numerous violations on quality and safety fronts, and banned some of its drugs.

Unlike other pharmaceutical acquisitions that have been targeted at buying Indian generic capacity to service Western and emerging markets, the Abbott-Piramal deal is primarily focused on the domestic market, according to Mumbai-based business magazine Business India. Drag according to your convenience. That is one reason pharmaceutical multinationals are doing deals with the relatively small number of well established Indian companies that have met international standards in manufacturing.


The Abbott-Piramal deal is the latest in a wave of consolidation within the global pharmaceutical industry over the past few years. In the past few years, they have realized that those pipelines are running dry, and are trying to diversify.

At the same time, hopes have receded of a wholly Indian pharmaceutical major emerging as a global player. According to Wharton faculty and industry experts, changing global business models and the resources needed to develop blockbuster drugs are propelling Indian companies to join forces with multinationals through strategic alliances or as targets for acquisitions.

My Saved Articles Sign in Sign up. The Indian unit of Abbott, which is a listed company, has a 2. You have abbitt create a whole organization, and that takes time. Unlike in a promoter stake sale, in this case the money will some to the company. Disagreements over valuation have prevented more deals from getting done.

Abbott snaps up Piramal’s formulations biz for $3.7 bn

The materialisation of this deal will also encourage buyers dezl their wallets. India certainly offers a large and growing domestic market with rising incomes and increasing health insurance coverage, says Danzon. Will be displayed Will not be displayed Will be displayed.

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