Abbott Buys India Unit for $3.7 Billion
May 24, 2010
Abbott Laboratories has agreed to buy the domestic healthcare business of India''s Piramal Healthcare Ltd., a leading branded generics company, for $3.72 billion, the companies announced last week reports the Associated Press. The deal is part of Abbott''s drive to establish itself as a leading emerging market pharmaceutical player and reflects the growing global importance of generics as well as the rise of India''s consumer market for drugs. Abbott, based in North Chicago, Ill., will pay $2.12 billion up front, plus $400 million annually for four years. Abbott expects pharma sales in India, which are on track to hit $8 billion this year, to more than double by 2015. Piramal has India''s largest sales force. Together, the companies will have over 7,500 employees in India. Abbott said it expects its Indian pharma business with Piramal, which will be incorporated into a new Abbott division created to boost sales outside the U.S., to grow by 20 percent a year, with sales topping $2.5 billion by 2020. Abbott said it plans to fund the Piramal acquisition with cash from its balance sheet and does not expect it to impact earnings guidance. The deal is still subject to shareholder approval.