It is going to be proverbial lull before the storm. The domestic pharma industry which has been devoid of much M&A activities of late will soon witness a flurry of deals of varied sizes and genre if the plans of several cash-rich subsidiaries of multinational drug makers pan out in the near future. However, this time around, the foreign pharma biggies are not looking for buying out controlling stakes in local companies. But they will go to the market shopping for ?brands’ that would give them a head start or fortify their position in different segments of their choice. The MNC shoppers on the prowl include the Indian arms of Pfizer and GSK.
According to analysts, the strategy makes good business sense for the MNC pharma companies, as acquiring brands, rather than companies, would give them a clear focus on products. It will save them the pain of integrating the target company with itself and would not tie their hands with unwanted assets or liabilities.
Pfizer Ltd (India), the local arm of the New York-based maker of Viagra, Pfizer, is planning to cherry pick pharma brands in order to shore up its sales, profitability and therapeutic reach. Talks are reportedly on with a host of pharma companies for possible buy outs of their brands, and the company is expected to make an announcement soon. Pfizer is reportedly evaluating ?several brands? for possible acquisitions.
Similarly, Glaxo SmithKline Pharma is also scouting for pharma brands to enhance its presence in India. The company is sitting on a huge pile of cash and will use some of it to fund the proposed acquisitions, sources said.
