with example of GSK

1. Mergers and Acquisitions: Indian
Pharmaceutical Industry
BY- Harishankar Sahu

2. •A transaction where two firms agree to integrate their
operations on a relatively co-equal basis because they
have resources and capabilities that together may create a
stronger competitive advantage.
oThe combining of two or more companies, generally by
offering the stockholders of one company .
oExample: Company A+ Company B= Company C.
MERGER

3.  It also known as a takeover or a buyout
 It is the buying of one company by another.
 Example: Company A+Company B=CompanyA.
ACQUISITION

4. MERGER ACQUISITION
i. Merging of two
organization into one.
ii. It is the mutual decision.
iii. Merger is expensive than
acquisition(higher legal
cost).
iv. It is time consuming and
the company has to
maintain so much legal
issues.
i. Buying one organization
by another.
ii. It can be friendly takeover
of company
iii. Acquisition is less
expensive than merger.
i. It is faster and easier
transaction.

5. WHY IS IMPORTANT PROBLEM WITH MERGER
i. Increase Market
Share.
ii. Economies of scale
iii. Profit for Research
and development.
iv. Reduction of
competition.
i. Increased business
complexity
ii. Employees may be
resistant to change
5

6. WHY IS IMPORTANT PROBLEM WITH ACUIQISITION
i. Increased market
share.
ii. Increased speed to
market
iii. Increased
diversification
iv. Avoid excessive
competition
i. Inadequate
valuation of
target.
ii. Inability to
achieve synergy.
6

7.  The Companies Act, 1956 (Section 391-394)
 The SEBI (Substantial Acquisition of Shares &
Takeovers) Regulations, 2011
 The Foreign Exchange Management Regulation,
2000
 The Income Tax Act, 1961
 The Competition Act, 2002 (Section 5, 6, 20, 29,
30, & 31)

8. GlaxoSmithKline plc (GSK) was formed from the December
2000 merger of Glaxo Wellcome plc and SmithKline Beecham
plc.
Global pharmaceutical, biologics, vaccines and consumer
healthcare company
3rd largest pharmaceutical company in the world based on
revenues
markets-- anti-infective , central nervous system, respiratory,
and gastro-intestinal/metabolic.
GlaxoSmithKline plc

9. GlaxoWellcome SmithKline Beecham
 In 1880, Burroughs Wellcome
& Company was founded in
London – research in animal
health
 Glaxo was founded
in Bunnythorpe, New Zealand
in 1904 – baby food producer
 Burroughs Wellcome and
Glaxo merged in 1995 to
form GlaxoWellcome
 Beecham Pills laxative in
England gave birth to
the Beecham Group in
1843.
 Smith, Kline & Co founded
in 1875 – pure research
 1989 merged
with Beecham to
form SmithKline
Beecham plc.

10.  Absence of proper R&D facilities
 Increase in market share
 Generic competition
 Increase in chronic diseases
 Product/Brand extension etc.

12.  Headquarter in Mumbai
 Lupin is an innovative pharmaceutical company producing and developing a wide
range of branded and generic formulations as well as biotechnology products and APIs
globally.
 Significant player in the Cardiovascular, Diabetology, Asthma, Pediatric and NSAID
space and holds global leadership positions in the Anti-TB and Cephalosporin segment.
 5th largest and fastest growing top 5 generics player in the US.
 3rd largest Indian pharmaceutical company by sales.
 Consolidated turnover - USD 2.06 billionand
 Profit after Tax - USD 393 million

13.  Established in 2007
 GAVIS pharmaceuticals, a New Jersey U.S. based private company, is
specializing in formulation development, manufacturing, packaging, sales,
marketing, and distribution of pharmaceuticals products
 It works with other companies which looking to develop drugs for
production, marketing, distribution and warehousing. GAVIS launched its
first product in May 2009

14. •Date of Acquisition – 23 july 2015
•Transaction valued at USD - 880 million
• Transaction has been Cash free and debt free
which unanimously approved by the Boards
of Directors of Lupin and GAVIS.

15. •GAVIS recorded sales of $96 million in FY 2014 and has
over 250 New Jersey based employees.
•GAVIS currently has 66 ANDA (Abbreviated New Drug
Application) filings pending approval with the US FDA .
•GAVIS has filed 25 Para IVs and 8 FTFs (first to file)
products.
• GAVIS’s pending filings address a market value of
about USD 9 billion

16. • The combined company will have a portfolio of
101 in-market products.
• 164 cumulative filings pending approval and a
deep pipeline of products under development for the
US.
• The acquisition creates the 5th largest portfolio of
ANDA filings with the US FDA, addressing a USD
63.8 billion market. products under development.
72% of these filings pending approvals

17.  The acquisition enhances Lupin’s scale in the US
generic market and also broadens Lupin’s
pipeline in dermatology, controlled substance
products and other high-value and niche
generics.
 GAVIS brings to Lupin a highly skilled US based R
& D organization .
 GAVIS’s New Jersey based manufacturing facility
will become Lupin’s first manufacturing site in
the US.
 Lupin’s proven commercialization capabilities,
vertically integrated manufacturing operations
and supply chain strengths will accelerate
GAVIS’s growth.

18.  www.lupin.com
 http://lupin.com/july-23-2015_2.php
 www.gavispharma.com