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Case
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Reference no. 308-095-1
Published by: IBS Center for Management Research
Published in: 2008

Abstract

In January 2007, Mylan Inc, one of the largest US generic drug makers, acquired a 71.5 percent stake in Matrix Laboratories Ltd, India, a leading active pharmaceutical ingredients supplier globally, for a cash and stock deal of US$736 million. The Mylan-Matrix deal was the largest acquisition in the Indian pharmaceutical industry and was viewed by analysts as a step toward backward integration for Mylan. The deal not only gave Mylan access to a low cost manufacturing platform, but also immediate presence in the emerging markets of Asia and Africa, as well as the lucrative generic drugs markets in Europe. Matrix, on the other hand, gained the much needed scale that generic companies required to survive in a very competitive market place. It was very important for Indian pharmaceutical companies considering that these companies did not have research molecules of their own. Analysts felt that with the global generic drugs industry undergoing a consolidation phase, large pharmaceutical companies were eyeing Indian pharmaceutical companies as potential targets of M&A (mergers and acquisitions) deals. This was because, with considerable pricing pressures in the US, these companies were on the lookout for low cost suppliers. In addition to the low cost manufacturing platform, the attractiveness of the Indian companies stemmed from the fact that they had large and varied product portfolios and world-class manufacturing facilities. Indian pharmaceutical companies also had a number of Drug Master Files and Abbreviated New Drug Application filings in the US, the world's largest market for pharmaceuticals. Moreover, some of these companies had developed a significant presence in the European and African markets through the inorganic route.

Teaching and learning

This item is suitable for postgraduate courses.
Location:
Industry:
Size:
Medium
Other setting(s):
2005-2007

About

Abstract

In January 2007, Mylan Inc, one of the largest US generic drug makers, acquired a 71.5 percent stake in Matrix Laboratories Ltd, India, a leading active pharmaceutical ingredients supplier globally, for a cash and stock deal of US$736 million. The Mylan-Matrix deal was the largest acquisition in the Indian pharmaceutical industry and was viewed by analysts as a step toward backward integration for Mylan. The deal not only gave Mylan access to a low cost manufacturing platform, but also immediate presence in the emerging markets of Asia and Africa, as well as the lucrative generic drugs markets in Europe. Matrix, on the other hand, gained the much needed scale that generic companies required to survive in a very competitive market place. It was very important for Indian pharmaceutical companies considering that these companies did not have research molecules of their own. Analysts felt that with the global generic drugs industry undergoing a consolidation phase, large pharmaceutical companies were eyeing Indian pharmaceutical companies as potential targets of M&A (mergers and acquisitions) deals. This was because, with considerable pricing pressures in the US, these companies were on the lookout for low cost suppliers. In addition to the low cost manufacturing platform, the attractiveness of the Indian companies stemmed from the fact that they had large and varied product portfolios and world-class manufacturing facilities. Indian pharmaceutical companies also had a number of Drug Master Files and Abbreviated New Drug Application filings in the US, the world's largest market for pharmaceuticals. Moreover, some of these companies had developed a significant presence in the European and African markets through the inorganic route.

Teaching and learning

This item is suitable for postgraduate courses.

Settings

Location:
Industry:
Size:
Medium
Other setting(s):
2005-2007

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