Ranbaxy pitted against Texas Pacific, Cinven, Permira for Merck''s generic-drug unit

12 January 2007

Mumbai: Ranbaxy Laboratories Ltd, India's largest pharmaceuticals firm, is likely to be pitted against other buyout firms, including Texas Pacific Group, Cinven Ltd and Permira Advisers LLP, in the bid for the generic-drug unit of Germany's Merck KGaA.

The firms are finalising offers and may team up with others if Merck decides to sell, the report said quoting unidentified sources.

Industry and analysts said Teva Pharmaceutical Industries Ltd. and Novartis AG, the world's two largest manufacturers of generic drugs, are also potential acquirers though the Darmstadt-based Merck declined to comment on the possible bidders for the division, which analysts say could fetch more than $5.2 billion (€4 billion).

Merck is considering the disposal as the division to focus on branded medicines after the $13.5 billion purchase of Serono SA.

The company may make a decision on the sale in the first half of the year, and will look at offers from both drugmakers and financial investors.

Merck was relegated to fourth among the world's generic-drug makers, behind Teva, Novartis and Watson Pharmaceuticals Inc, following a series of takeovers. The unit brings in almost a third of Merck's revenue and generates about a quarter of operating profit reported sales of 1.8 billion euros last year.