MUMBAI: Every takeover leads to speculation on which would be the next target in the industry and experts talk about consolidation.So is the case with the pharmaceutical sector after Abbott of the US agreed to pay with an arm and a leg for Piramal Healthcare’s generics unit.
“With two deals as examples, it will be easier to sell at higher valuations to MNCs,” the investment banker said.
Abbott agreed to buy Piramal Healthcare’s domestic formulations business for Rs17,000 crore, at nine times the unit’s current sales, a valuation unheard of in the industry in India. The high valuation overshadows what the Japanese company Daiichi Sankyo paid for Ranbaxy two years ago, which was then considered expensive. Global pharmaceutical companies are looking at the Indian pharmaceutical sector that is growing between 13% and 15% compared with 2-3% in the West.
