DSM May Acquire Control Of India's Alpha Drugs

Dutch chemical/pharmaceutical company DSM is likely to acquire a 51%stake in India's Alpha Drugs, the country's largest producer of D-alpha phenyl glycine derivatives, the key input for penicillin-based products, according to the Indian Economic Times.

DSM, which currently owns 15% of Alpha Drugs, plans to raise its stake by expanding the equity base through a preferential allotment of shares, the newspaper said. It quoted pharmaceutical industry sources as saying that DSM may make a public offer to acquire a further 20% following the completion of the preferential issue in accordance with the Securities and Exchange Board of India guidelines.

After the takeover, the company's name is expected to be changed to DSM India Ltd, the media report said. At present there is no technical tieup between the two companies, but with increased equity participation DSM is likely to bring in new technology for the current product line and assist in introducing new products. Thus far, Alpha Drug officials have declined to comment on DSM's proposed acquisition, except to say that talks are in progress with the company.