3i, the UK-based private equity company, has sold German generic pharmaceutical company betapharm Arzneimittel to Indian peer Dr Reddy’s Laboratories. The transaction value amounts to €480m (US$570m). The sale also includes the not-for-profit beta institute.
Bernie Schuler has managed this investment for 3i, which bought betapharm in March 2004. Bear Stearns International and Sal Oppenheim acted as financial advisers to 3i and Clifford Chance as external legal counsel for 3i. Rothschild acted as financial adviser and Freshfields Bruckhaus Deringer as external legal counsel to Dr Reddy’s in this transaction.
Dr Reddy’s apparently had to fight off a competing bid from Indian rival Ranbaxy Laboratories, which had confirmed that it had submitted a takeover bid in Germany.
3i acquired its stake in the German generic drugs manufacturer when it backed a management buyout valued at €300m in 2004. The vendors were Andreas and Thomas Strüngmann, who also founded Hexal, the generic drugs business sold to Switzerland’s Novartis for €4.35bn in 2005.
Dr Reddy’s hired investment bank Rothschild to advise on the deal, which is the largest ever cross-border acquisition by an Indian buyer of non-energy sector assets.
Rothschild has been increasingly active as an adviser on the rising Indian M&A scene in recent years. Last year, it acted on its first US$1bn-plus Indian deal when it advised Ratnagiri Gas & Power.