Wednesday 18 June 2014

Indian giant Cipla buys 60% stake in Lanka’s Citihealth firm for Rs. 1.8 b

Cipla a global pharmaceutical giant from India has acquired a 60% stake in a subsidiary of family-owned Sri Lankan firm Citihealth Imports Ltd. for $ 14 million (over Rs. 1.8 billion).

In a filing to the Bombay Stock Exchange, Cipla said its wholly-owned subsidiary Cipla (Mauritius) Ltd. has signed a definitive agreement with its existing Sri Lankan distributor for acquisition of a 60% stake in a new company. Cipla didn’t name the Lankan distributor, which however is Citihealth Importers Ltd., Chairman of which is Col. (Rtd) Chandra Jayaratne.

The new company will market Cipla’s products in Sri Lanka, the Indian firm said.

“The consideration payable for the transaction is $ 14 million,” the Cipla filing said, adding that the proposed acquisition was subject to regulatory approvals.

As part of its global expansion, Cipla has been active in acquisitions.

Last year, it completed the buyout of South African pharma firm Cipla Medpro for INRs. 2,707 crore.

Cipla had also acquired Croatia-based firm Celeris, distributor of its products in that country last December.

Local pharmaceutical industry analysts viewed the Cipla-Citi health deal as a move to maximise strong growth prospects in Sri Lanka as well as Government support to local manufacture of drugs.

Over 70 years old, Cipla’s styles itself as one of the most respected pharmaceutical names in India as well as across more than 170 countries. Its annual turnover is around $ 1.5 billion and has 26,000 employees. It has over 2,000 products, 65 therapeutic categories, over 50 dosage forms. Cipla’s sales out of India account for 63%.

Citihealth is a pharmaceutical importer and distributor for near two decades set up by Col. Jayaratne, a senior marketer and a management professional. It has a work force of 270.

Apart from representing Cipla and gaining popularity in marketing its range of anti-asthmatic products, Citihealth also represents several other pharmaceutical firms from Indian, Bangladesh, Pakistan, and France.

Its tie-up with Serum Institute of India Ltd. saw Citihealth becoming the first Lankan pharmaceutical company to introduce an oral drug for thalassemic patients who otherwise were on painful daily eight-hour drips. Serum, founded in the year 1966, has progressively established as the world’s largest producer of Measles and DTP (Diptheria, Tetanus, Pertussis) group of vaccines, distributed to over 140 countries.

Citihealth also handles veterinary products and fast moving consumer goods brands.
Board of Directors of Citihealth comprises Lt. Col. (Rtd) Chandra Jayaratne – Chairman, Sunethra Jayaratne – Deputy Chairperson, Sanjaya Jayaratne – Managing Director, Dr. Chathurani Jayaratne – Directress and Asoka Senanayake – Director.
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