Natco Pharma has proposed to acquire a significant 36% stake in the South African pharmaceutical firm Adcock Ingram Holdings (AIHL) for approximately $226 million (around ₹2,000 crore). This move represents a strategic investment that aims to enhance Natco’s presence in the South African market.
### About Adcock Ingram Holdings
Founded in 1890, Adcock Ingram boasts a varied product portfolio, which includes generic and branded formulations, critical-care hospital products, and consumer home-care items. The company operates across four segments: prescription, consumer, over-the-counter (OTC), and hospital products.
### Details of the Acquisition
The acquisition is anticipated to finalize by 2025. Following the transaction, Adcock Ingram will function as a private entity in South Africa, with Bidvest retaining a majority stake of 64.25% and Natco holding 35.75%, which includes a previously owned 0.80% stake. Natco will incorporate 35.75% of AIHL’s net profits into its financial statements. In the financial year ending June 2024, AIHL reported revenues of $536 million and a profit after tax of $45 million.
### Strategic Benefits
Rajeev Nannapaneni, CEO and Vice-Chairman of Natco Pharma, emphasized that Adcock Ingram is a reputable pharmaceutical company with recognized brands, which holds a strong foothold in the South African market. He stated, “The proposed transaction will provide Natco Pharma with a well-established entry into the Southern African market. It will also allow us to tap into new revenue streams and expand our footprint in one of the largest and rapidly growing emerging markets, while providing a gateway to the African continent.”
### Additional Investments
In conjunction with the acquisition, Natco’s board has approved a plan to establish a wholly owned subsidiary in South Africa, with an investment of up to ₹2,100 crore this year. This initiative aims to foster growth and profitability in new geographical areas. Additionally, the board has agreed to liquidate its wholly owned subsidiary, Time Cap Overseas (TCOL), while retaining investment in the step-down subsidiary NatcoFarma do Brasil.
Natco’s shares witnessed a 2.01% increase, closing at ₹1,034.75 each on the BSE.