Aventis Pharma Ltd, a unit of the $44 billion French pharmaceutical giant Sanofi-Aventis, said that it would acquire Universal Medicare Pvt Ltd’s marketing and distribution business of branded nutraceutical formulations in India. While the deal size was not disclosed, Aventis was reportedly paying Rs 450 crore-Rs 500 crore for the business. The deal is expected to close by the fourth quarter of 2011.
This is the second major inbound deal in the Indian nutraceutical market this month. Earlier, French food products giant Danone said that it was acquiring the nutrition business of the Wockhardt Group for $355 million or Rs 1,580 crore to enter the Indian baby nutrition and medical nutrition market.
Of the global nutraceutical market of $117 billion (Rs 514,800 crore), Indian has less than 1 per cent share and is estimated to be around Rs 4,400 crore in size, according to a 2009 report by Ernst & Young.
Mumbai-based Universal Medicare manufactures, markets and distributes branded nutraceutical formulations. The business had a turnover of Rs 110 crore for FY11. Universal’s portfolio of more than 40 brands includes nutraceutical products in categories like antioxidants, vitamins and mineral supplements, anti-arthritics, anti-osteoporotics, liver tonics and other nutrients. Around 750 employees of Universal will also transition to Aventis Pharma as a part of this deal. Universal Medicare, which is mainly into marketing of formulations, will continue to manufacture the products being acquired by Aventis.
The share price of Aventis Pharma was trading at Rs 2,119.95 on the BSE, up 4 per cent during Wednesday morning trade.
With this acquisition, Aventis Pharma will advance its sustainable growth strategy in India and facilitate the creation of a consumer healthcare and wellness platform, according to a company statement.
“This strategic acquisition will allow Aventis Pharma and Sanofi Group to reach out to large sections of India’s population through a broad offering comprising of pharmaceuticals, vaccines and now nutraceuticals,” said Dr Shailesh Ayyangar, managing director of Aventis Pharma and vice-president (South Asia), Sanofi. In 2009, Sanofi-Aventis picked up a controlling stake in Hyderabad-based vaccine maker Shantha Biotechnics, valuing the Indian company at Rs 3,770 crore.
Universal group has two lines of business—marketing its own formulations and contract manufacturing for other pharmaceutical companies. The group its started operations by marketing the UK-based Seven Seas’ cod liver oil in India and over time, built its own product portfolio focused on the nutraceutical and lifestyle segments. It has two manufacturing facilities—one at Sarigam (Gujarat) and the other located in Bengaluru (Karnataka).