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Cipla plan to spend about $512 million (10 rand a share), to take over Cipla Medpro before delisting the South African company.
“With a 100 per cent buy-out plan, Cipla will have good operational synergies in the African market,” Siddhant Khandekar, an analyst at ICICI Direct in Mumbai told Reuters.
The analyst also said it would be difficult to predict if the payback would occur quickly.
In November last year year, Cipla offered to buy 51 per cent of Cipla Medpro at 8.55 rand a share.
Shortly after Cipla’s offer the South African company won a $158 million (1.4 billion rand) government drug contract to supply HIV/AIDs drugs to local hospitals – analysts speculated that the Indian drugs maker would have to increase its bid.
Shares in Cipla were up 0.8 per cent at 367.40 rupees in India this morning.