Aurobindo Pharma gains on acquisition deal with Activis

Aurobindo Pharma gains on acquisition deal with ActivisIn response to Aurobindo Pharma acquisition deal with Dublin-based Actavis Plc, shares of the Indian pharmaceuticals firm jumped more than 4 per cent to hit a high of Rs 402 apiece on Monday.

Aurobindo announced that it would acquire Actavis' commercial operations in seven western European countries, viz.  Belgium, Italy, France, Spain, Portugal, Germany and the Netherlands.

The transaction will cost Aurobindo _30 million.  The Indian company has plans to fund the acquisition through internal accruals.

The businesses that are being offloaded by Actavis are currently loss-making but the Indian company is optimistic that they will return to profitability when they will work alongside its vertically integrated platform and existing commercial infrastructure.

Arvind Vasudeva, CEO of Formulations Business at Aurobindo, said, "Aurobindo looks forward to the opportunities this transaction provides for us to work even more closely with Actavis, who are one of our existing strategic partners."

He added that Actavis employees in the seven countries would join Aurobindo's growing global team.

As per Aurobindo's estimates, the net sales for the acquired businesses would be nearly _320 million in 2013 with a growth rate of over 10 per cent year-on-year.

Aurobindo stock opened at Rs 382 a share and so far touched a high of Rs 402 on the Bombay Stock Exchange.