Big news has arrived, action will be seen on the shares of these two pharma companies as soon as the market opens tomorrow!

Torrent Pharma is now in talks with another global management company for a loan to acquire stake in Cipla. Apart from this, many other companies are also considering financing options.

Pharma company Torrent Pharma has intensified preparations for the acquisition of Cipla. News agency Reuters has confirmed this in one of its reports and said that Torrent Pharma has now started preliminary talks with Apollo Global Management for a loan of $ 1 billion so that the company can raise additional funds for the acquisition of Cipla. In this report, two officials having knowledge of the matter have been quoted.

Torrent Pharma is currently exploring financing options of $3-4 billion so that it can participate in the acquisition process of Cipla. Bernstein analysts estimate that about $7 billion will have to be spent to buy 60% stake in Cipla. Potentially, this could be the country’s biggest deal in the pharma sector.

Blackstone is also showing interest

It is also being claimed in media reports that apart from this, Torrent Pharma is also in talks with CVC Capital Partners and Bain Capital for loan. According to information received from sources, a total deal worth $1.5 billion can be made between these two. Morgan Stanley and Barclays are also in talks with Torrent Pharma for financing facilities including loans.

Cipla’s founding family is exploring possible options to sell 33.4% stake. According to the rules, if this happens, the company will have to make an open offer to sell additional 26% stake. Some reports have claimed that Blackstone is also in the list of potential buyers of Cipla.

Apollo bullish on investing in Asia

Reuters has said in its latest report that Apollo is also interested in buying some stake from the founding family of Cipla but the final decision will depend on how its negotiations with Torrent go. Apollo currently looks bullish on its Asia strategy and India in particular. The balance sheets of Cipla and Torrent Pharma are strong. In such a situation, this deal of Apollo can prove beneficial. However, no official confirmation has come from any company on this entire matter.

By March 2023, Apollo manages $438 billion of credit and $101 billion of private equity. It is one of the largest asset management companies in the world. Last year itself, the company has opened its office in Mumbai and has recently issued a loan of about 2.5 billion dollars to many units including Mumbai International Airport and JSW Cement.

Cipla, with a market capitalization of more than Rs 1 lakh crore, manufactures anti-allergy drug Cetirizine as well as generic drugs of Advair and Albuterol. This company has competition from global pharma companies Pfizer and Abbott. The pharma business in India is expected to increase from $50 billion at present to $130 billion by 2030. On the other hand, the market capitalization of Torrent Pharma is 56% less than that of Cipla. This company manufactures medicines for diabetes, pain and oncology in about 40 countries.

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