Cipla hopes to conclude Medpro acquisition by mid-August

"We are hoping the process of acquiring Cipla Medpro in South Africa will be completed by mid-August," says Y K Hamied, Chairman, Cipla. Speaking to Business Today from the United Kingdom, he said only some paperwork remained. In a little over a month after Cipla's offer to acquire 100 per cent of Cipla Medpro in South Africa got the approval of Medpro shareholders, the competition authorities of South Africa and Botswana on June 20 have also given their approval.

In a statement to the Bombay Stock Exchange, Cipla has informed: "With reference to the earlier announcement dated May 15, 2013 on acquisition of 100 per cent of Cipla Medpro South Africa Ltd shares by the company.... the approvals for the scheme from the South African and Botswana competition authorities have been received."  It adds a small caveat: "The implementation of the scheme is still subject to various other approvals and conditions, including regulatory and government approvals."

Explaining the significance of the Medpro acquisition, Hamied said: "It means we are prioritising Africa as a major thrust area for the company. Cipla has a good name in Africa." While the company is in South Africa, he says, the significance for Cipla is much more that one region. "May be we will use South Africa as a base for expansion into the rest of Africa," he adds. "One does not know."

In April this year, Cipla CEO Subhanu Saxena had told BT: "We will focus on building a marketing and sales front-end in markets that have a critical mass of the branded generics business, for example, South Africa." Cipla offered to acquire 100 per cent of Cipla Medpro for around $512 million. Cipla Medpro was born through a joint venture between Cipla International and South African company Medpro Pharmaceutica. In 1993, CEO Jerome Smith founded Medpro Pharmaceutica, one of South Africa's first generic medicine companies. Cipla Medpro is South Africa's third-largest pharmaceutical company with strong presence in cardiovascular, anti-retroviral, respiratory and neuropsychiatric categories.

On the Bombay Stock Exchange on Friday, June 21st, Cipla shares closed at Rs 381.40 (up 0.59 per cent).