Torrent Pharma seeks $1 billion loan for Cipla bid
India's Torrent Pharmaceutical is in preliminary discussions with Apollo Global Management to secure a loan of up to $1 billion, aiming to fund a planned bid for its larger rival, Cipla, according to Reuters. The potential deal could be worth as much as $7 billion, making it India's largest pharma deal to date. Foreign banks, including Morgan Stanley and Barclays, are also in talks with Torrent to extend loans and arrange financing for the acquisition.
Equity partners join Torrent's acquisition consortium
The founding family of Cipla is reportedly keen to sell its 33.4% holding, which would trigger an open offer for another 26% as per Indian regulations. Torrent has been in talks with CVC Capital Partners and Bain Capital, who might become equity partners in a consortium and contribute as much as a combined $1.5 billion to the deal. Meanwhile, Blackstone is also interested in bidding for Cipla.
Apollo's interest in Cipla depends on Torrent talks
Apollo is considering purchasing a small part of the Cipla founding family's stake, but a final decision will depend on how talks progress with Torrent. One source said Apollo is "quite bullish on their Asia strategy, and India in particular...both Cipla and Torrent have strong balance sheets." The source declined to be identified as the talks were private.
Torrent-Cipla deal will signal major pharma industry consolidation
If successful, the acquisition of Cipla by Torrent would mark a major consolidation in India's pharmaceutical sector. Torrent's market cap is currently 56% lower than Cipla's. The company sells medicines related to diabetes, pain management, and oncology, while being present in 40+ countries. The deal could strengthen Torrent's position in the market and create new opportunities for growth and expansion. Additionally, it highlights the increasing interest of global investment firms in India's thriving pharma industry.
