MUMBAI -- Mylan Laboratories Inc. said it will buy a controlling stake in Matrix Laboratories Ltd., marking the latest investment in India's pharmaceutical sector by a global drug maker.
Mylan, of Canonsburg, Pa., said it offered to buy a 51.5% stake in Matrix for 306 rupees ($6.59) a share, nearly a 15% premium to Matrix's average price of the past 30 days. Mylan said it will offer to buy an additional 20% stake in Matrix in an offer to the remaining holders, in line with Indian regulations, bringing the value of the deal to $736 million.
Matrix won't delist its shares after the acquisition, said an investment-banking manager who advised the company. Yesterday, Matrix rose 0.1% to 277.55 rupees on the Bombay Stock Exchange. Mylan was down 1.6%, or 32 cents, to $20.28 in New York Stock Exchange composite trading.
"Such deals would help local companies compete in the global business more effectively, as we expect, going forward, Mylan will do a lot of formulation work out of India," said Sunil Mehra, director for the health-care sector at DSP Merrill Lynch, which advised Matrix on the deal.
Matrix is India's sixth-largest drug maker by annualized revenue. In the year ended March 31, its net profit rose 53% year to year to 1.99 billion rupees on an 82% rise in sales to 11.59 billion rupees. Analysts said Western generic-drug makers are turning to Indian manufacturers as they seek cheaper manufacturing bases. Rivals such as Israel's Teva Pharmaceutical Industries Ltd. and Watson Pharmaceuticals Inc., of Corona, Calif., already have such agreements with Indian manufacturers.
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