July 14 (Bloomberg) -- Super Religare Laboratories Ltd., controlled by billionaire brothers Malvinder and Shivinder Singh, agreed to buy Piramal Healthcare Ltd.’s diagnostics unit for 6 billion rupees ($129 million) to become India’s largest provider of laboratory services.
The combined entity will have about 170 laboratories serving more than 12 million customers annually, Piramal said in a statement today. Mumbai-based Piramal is also in talks to buy 10 percent of Super Religare and the companies expect to decide on the purchase by tomorrow, Gopal Vaidyanathan, director of strategy at Super Religare, said in a telephone interview today.
The purchase will help increase medical-imaging services including X-rays and ultrasounds at New Delhi-based Super Religare, which has focused on pathology services such as blood tests, Vaidyanathan said. India’s diagnostic services market may expand as much as 24 percent annually from 120 billion rupees this year, he said.
“This combination will go a long way in changing the diagnostic services landscape of not just India but also the Asia region,” Ajay Piramal, chairman of Piramal group, said in the statement.
Piramal Healthcare fell 1.5 percent to close at 503.85 rupees in Mumbai trading. India’s benchmark Sensitive index dropped 0.3 percent.
Super Religare will pay 3 billion rupees initially and the remainder over three years, Piramal said in the statement. Vaidyanathan said the purchase will be made in cash and completed in about six weeks. The agreement includes a clause that Piramal won’t enter the diagnostic-test services market for three years, he said.
The unit, Piramal Diagnostic Services Pvt., posted a net loss of 53.3 million rupees in the year ended March 31, according to the company’s annual report.
Piramal Diagnostic runs laboratories at some hospitals of Fortis Healthcare Ltd. New Delhi-based Fortis, India’s second-biggest hospital operator, is also controlled by the Singh brothers.
The transaction announced today leaves Piramal Healthcare with contract-manufacturing and over-the-counter drugs businesses. In May, the company agreed to sell its generic-medicine unit to Abbott Laboratories for $3.72 billion.
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