Dr Reddy's Laboratories is planning a big-ticket acquisition in Europe to strengthen its generics portfolio in the world's second largest drug market. To this end, the company is exploring suitable options in Germany and France.
It is learnt that DRL is ready to spend up to $200 million (close to Rs 900 crore) for the acquisition.
"We have a cash reserve of Rs 935 crore (Rs 9.35 billion), which is reflected in this year's balance sheet. Hence finance for the acquisition is not a constraint," a senior DRL executive told Business Standard.
He also said the company had zeroed in on France and Germany as it already had a strong presence in the United Kingdom. In fact, the management team of its UK subsidiary is currently in talks with a few generics units.
When it happens, this will be Dr Reddy's second acquisition in Europe. In 2002, the company had acquired two companies in the UK -- BMS Laboratories and its wholly owned subsidiary, Aurigene Discovery Technologies -- for around $12 million.
A growing number of Indian pharmaceutical companies is actively scouting for acquisitions in Europe after the tightening of the US market. Increased competition and the threat from "authorised generics" by Big Pharma has caused an unprecedented erosion in the prices of generic drugs there. In some cases, prices have tumbled by as much as 95 per cent.
