Is Indian pharma industry open to domestic consolidations?

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Is Indian pharma industry open to domestic consolidations?

Ever speculated on Ranbaxy forming an alliance with Dr Reddy's or Cipla or even Teva for that matter? Big ticket domestic consolidations have eluded the Indian pharmaceutical industry. But maybe not for soon. Malvinder Singh, MD & CEO of Ranbaxy says for the first time that he's willing to reduce ownership for the right deal.

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Ever speculated on Ranbaxy forming an alliance with Dr Reddy's or Cipla or even Teva for that matter? Big ticket domestic consolidations have eluded the Indian pharmaceutical industry. But maybe not for soon. Malvinder Singh, MD & CEO of Ranbaxy says for the first time that he's willing to reduce ownership for the right deal.

India's largest pharmaceutical company Ranbaxy was founded by Dr Parvinder Singh's father and is managed by his son Malvinder Singh. Dr Reddy's, India's second largest drug firm, is owned and managed by the Reddy family. Third ranking Cipla is an enterprise of the Hamied family.

The one thing common amongst most of India's pharma firms is that they are family owned. Families that rarely want to give up control. That's one reason why India has seen no big sized acquisitions or equity alliances in the space. The other is that most of them have been busy these past few years chasing growth and a global footprint. But maybe the time has come to experiment, to mix and match and create a mega Indian pharma company. Malvinder Singh says he's open to the idea.

Malvinder Singh , MD & CEO, Ranbaxy said, "We have always evaluated these opportunities. I'm not going to tell you who and how but we are open to diluting stake to make Ranbaxy bigger."

So would he prefer combining with the likes of Dr Reddy's which is similar in size and business focus. Or would a Cipla be a better fit? After all it's the domestic market leader and would make for strong backward integration for Ranbaxy which earns 80% of its revenues from overseas. Or would Ranbaxy prefer an international partner say Teva or Sandoz , two of the world's largest generic drug companies?

"One needs to see the synergies," said Malvinder Singh and when asked as to who would fit the bill he replied, "We have a set of names."