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Meda Gains Most in a Year on WSJ Report of Sale to Sun

Meda Shares Rise After WSJ Reports Talks for Sale to Sun Pharma
Meda climbed 3.4 percent to 86.80 kronor at 1:45 p.m., giving the company a market value of 26.2 billion kronor. Source: Meda AB via Bloomberg

Meda AB rose the most in a year in Stockholm trading after the Wall Street Journal reported that the Swedish drugmaker is in talks to be acquired by Sun Pharmaceutical Industries Ltd. for almost $5 billion.

Meda climbed 4.5 percent to 87.70 kronor at 3:12 p.m., giving the company a market value of 26.5 billion kronor ($4 billion). The stock gained as much as 6.4 percent, the biggest intraday advance since May 9, 2012.

Sun, India’s biggest drugmaker by market value, has been looking to expand in Europe and the U.S. as the company tries to extend its geographical reach. The Mumbai-based company last year considered a purchase of German generic-drug maker Stada Arzneimittel AG, people with knowledge of the matter said at the time.

Buying Meda would bring Sun the Dymista allergy medicine, which was approved in the U.S. last year. Meda’s products, focused on respiratory, cardiology, dermatology, central-nervous-system, pain and inflammation treatments, generated sales of 12.99 billion Swedish kronor in 2012.

Mira Desai, a spokeswoman for Sun Pharma in Mumbai, declined to comment on the Journal report. Paula Treutiger, an investor-relations executive at Meda, and Anders Larnholt, vice president for corporate development, didn’t return two phone messages seeking comment on the report.

Bank Financing

Sun has been talking to banks to arrange financing for a purchase of Meda, the Journal reported today, citing people familiar with the matter. The Indian company wants letters of credit from banks to present to Meda to convince board members that it can complete the deal, the Journal said.

Managing Director Dilip Shanghvi is Sun’s largest shareholder, with an 11 percent stake, according to data compiled by Bloomberg. He is India’s third-wealthiest person, according to the Bloomberg Billionaires Index. Israel Makov, a former chief executive officer of Teva Pharmaceutical Industries Ltd., is Sun’s chairman.

A purchase of Meda probably would require the backing of Sweden’s Olsson family, which owns shipping, offshore-drilling, finance and property companies. The family owns more than 22 percent of Meda’s stock through its Stena Sessan AB holding company. Bert-Ake Eriksson, Stena Sessan’s CEO, is Meda’s chairman. Stena Sessan’s office referred questions to Eriksson and said he wasn’t available for comment.

Sun fell 2.8 percent to close at 1,044.1 rupees, giving the company a market value of 1.08 trillion rupees ($19.1 billion). The stock has advanced 42 percent this year.

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