The Aditya Birla group is in an advanced stage of negotiations with Ahmedabad-based Intas Pharma to take over the latter's biotechnology arm.
With this acquisition, the Rs 28,000-crore (Rs 280 billion) Aditya Birla group will be the third largest industrial house in the country -- after Reliance and the Tatas -- to foray into the biotechnology business.
Sources close to the development said several rounds of talks had already taken place and the deal was expected to be signed shortly. Intas had been looking around for a strategic partner for quite some time, they pointed out.
Mani Aiyer, a senior finance executive at Intas Pharma, refused to comment on the development. Intas Pharma Chairman Hasmukh Chudgar was not available for comment.
The Aditya Birla group spokesperson said the group did not comment on market speculation. "It is known that the group intends to foray into the biotechnology business. However, no deal has been struck so far," she said.
The Rs 400-crore (Rs 4 billion) Intas Pharma has a research and development division on biotechnology discoveries. Sources close to the company said Intas was planning to develop new technologies for biotechnology products besides making forays in preventive vaccines.
The acquisition will provide the Birla group with a vehicle to enter into the sunrise biotechnology business.
However, it is not known whether the Birla group would foray into the new business through one of its existing companies or would create a new outfit. The group has been looking for getting a headstart in the ssector by acquiring a smaller niche product company in the field, preferably a start-up.
Intas Pharmeceuticals undertakes R&D activities in biotechnology products and vaccines clinical research for new molecules (phase III trials) are in progress.
It has products for cancer treatment and acute promyelocytic leukaemia, which is the cancer of white blood cells that can affect patients at any time in their lives.
