Japan's largest pharma company-Takeda may acquire the pharma businesses of either Lupin or Cipla. The deal with Lupin seems more likely as the promoters of the company have shown interest in selling the domestic formulations business in the recent past.

Takeda is Japan's largest company by sales and is searching for overseas acquisitions as it faces pricing pressures from its core domestic market and specific threats to future sales with the expiry of patents on leading products including Actos for diabetes and Prevacid for ulcers. It has more than Y860 Bn in cash and is open to raising debt to fund overseas acquisitions.

Takeda is acquiring Swiss drugmaker Nycomed at a valuation of about $14Bn.

Transaction Reference: Reuters

Lupin is open to sell the domestic formulations business but is not willing to part with the research facility and is seeking a valuation of 17 times to the revenues.

The Indian market contributed 32 % of Lupin's revenue of Rs.5,706 Cr in 2010-11. Sales at Lupin's domestic formulations unit increased by 17% to Rs.1,550 Cr in fiscal year ending 2011.

Recently, Lupin acquired the worldwide rights for Australian brand Goanna from Aspen Pharmacare Holdings, through its Australian subsidiary Generic Health Pty Ltd.

In 2010, it acquired controlling stake in Generic Health Pty, company engaged in marketing, selling and distributing a range of generic pharmaceutical prescription and OTC medications.

Takeda is the first foreign pharma major searching acquisition targets in India. Many other pharma majors are targeting the emerging markets including India for acquisitions as they are pricing pressures and threats to revenues due to patent expiry of their best selling drugs.

US based Sanofi Aventis may also acquire a majority stake or key brands of nutraceuticals maker - Universal Medicare.

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