New Delhi: India's largest drug firm Ranbaxy seems to have pulled out of the race to acquire German pharmaceutical company Merck's generic business on concerns of over-valuation.
Ranbaxy, which is the only Indian company to have entered the second round of bidding, decided to opt out after valuations were stretched to $6 billion, industry sources said.
Sources said an auction at this stage could easily take the valuations to over $6.5 billion. Earlier, another Indian company Dr Reddy's Laboratories had pulled out of the race citing over-valuation.
Shares of Ranbaxy were trading up 5.13 per cent at Rs 333.10 on the Bombay Stock Exchange on Tuesday on reports that the company has withdrawn its bid.
Ranbaxy was seeking financial advise from Goldman Sachs and Citigroup on the feasibility of the deal. Besides the Indian firm, global pharmaceutical majors including Teva, Mylan and Actavis managed to enter the second round for acquiring the generics business Merck.
Ranbaxy CEO and Managing Director Malvinder Singh had earlier said that the company was looking to evaluate the assets and were going to be very practical about it. "We are not in a rat race for acquisition but are focused on creating value for shareholders in the best way we can," he had said early this month.
Merck is hiving off its generic unit to concentrate on branded formulations. It sells products in over 90 countries and is the fourth largest generic producer.
With PTI inputs
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