Cipla to buy fellow Indian drugmaker Meditab in $28.5 deal

India's third largest drugmaker Cipla (BSE: 500087) says that its board has approved the acquisition of fellow India based Meditab Specialities for 1.33 billion rupees ($28.5 million). The former's shares dropped 2.85% to 308.20 rupees on the news on Wednesday.

Meditab has small-mid-sized formulation manufacturing facilities at multiple locations which are substantially manufacturing formulation products for the company. In addition to control over these manufacturing facilities, which would result in improvements in operational and cost efficiencies, Cipla will benefit from Meditab's investments. Meditab is implementing expansion of its API/intermediates international business through a manufacturing facility in China and entering into the high growth Chinese domestic formulations market through the local production unit in China.

There are additional business opportunity in Africa by leveraging on local manufacturing facility in Uganda, as well as extending the company`s existing strategic relationship for R&D on stem cell-based products via Meditab's facilities in India and Malaysia, through equity participation.