Aurobindo Said to Enter Fray for $1.5 Billion Teva Portfolio

  • Teva selling European drug portfolio to appease regulators
  • Indian drugmaker would finance deal with over $1 billion loan

Indian drugmaker Aurobindo Pharma Ltd. is among companies considering bids for Teva Pharmaceutical Industries Ltd.’s portfolio of drugs in the U.K., Ireland and Iceland, people familiar with the matter said.

Aurobindo would finance the deal with a loan of more than $1 billion, according to one of the people, who asked not to be identified because the deliberations are private. No final decision has been made, and the company could still decide against a bid, the people said. The sale could fetch about $1.5 billion, people familiar with the matter have said previously.

Teva is selling assets as it works to get regulatory approval for its approximately $40.5 billion acquisition of Allergan Plc’s generics business. A buyer for its U.K., Ireland and Iceland assets could emerge in the next few weeks, the people said. Other bidders remain interested in acquiring the portfolio of drugs, they said.

Shares of Aurobindo rose 1 percent to 765.25 rupees at 1:53 p.m. in Mumbai. A purchase of the Teva portfolio would be the Indian drugmaker’s largest acquisition, surpassing its $132.5 million purchase of U.S. vitamin maker Natrol Inc. in 2014, data compiled by Bloomberg show.

“Any acquisition they would be doing at this point would put some pressure on the balance sheet,” Surya Patra, an analyst at PhillipCapital (India) Pvt. in Mumbai, said by phone Tuesday. “There would be some concern about that.”

Private Equity Interest

“We can confirm that we are advised by Greenhill & Co. on the divestment of certain U.K. and Ireland assets following the remediation package agreed with the EU Commission in March,” Yonatan Beker, a spokesman for Teva, said in an e-mailed comment. “But we are not in a position to confirm who any potential bidders are, nor to comment on market speculation on sale values.”

A spokeswoman for Aurobindo declined to comment. Aurobindo, based in Hyderabad, manufactures generic drugs and pharmaceutical ingredients and exports to more than 125 countries.

Teva is working with advisers on the disposals, which have attracted interest from private equity firms Apollo Global Management LLC and Cinven Ltd. as well as drugmakers such as Mylan NV and Novartis AG, people with knowledge of the matter said in May. The European Commission would prefer that the assets go to a strategic buyer with experience in the European generics market, the people said at the time.

In March, Teva won conditional European Union approval for the Allergan unit takeover after allaying regulators’ concerns with concessions, including the sale of “the great majority” of the subsidiary’s U.K. and Irish business.

Teva has already agreed to sell some other assets in order to get global antitrust approval. In June, it pledged to sell a basket of generic drugs to Australia’s Mayne Pharma Group Ltd. for $652 million. Earlier that month, Impax Laboratories Inc. and Dr. Reddy’s Laboratories Ltd. both announced deals to buy some other generic products from the two companies.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE