India's Torrent Pharma In Advanced Talks With CVC, Bain Capital To Fund Cipla Deal: Report

Torrent Pharmaceuticals is in advanced discussions with CVC Capital Partners and Bain Capital to fund a buyout of Cipla's promoter stake. The private equity firms will help Torrent raise up to $1.5 billion.

Cipla is the third biggest drugmaker by sales. The deal, if it goes through, can become one of the largest pharma deals in India ever, according to a Reuters report.

The private equity firm, Blackstone, is also interested in buying the promoter stake in Cipla.

Cipla’s founding family is keen to sell their 33.4 per cent promoter stake completely, according to sources cited by Reuters. Any bid will also trigger an open offer for another 26 per cent stake, as per Indian regulations. This will lead to a potential deal worth $6.75 – $7 billion, according to an August 30 report by private wealth management firm Bernstein.

Torrent is likely to reach a decision to finalise its consortium financing partner in the next few days, according to a source.

Torrent and Blackstone have both submitted non-binding bids for Cipla.

Foreign banks, such as Morgan Stanley and Barclays, are also in talks with Torrent to arrange for potential debt financing for the deal.

Cipla is more likely to be keen on getting a strategic partner on board, like Torrent, instead of a pure financial investor. This is due to the fact that it will make it easier for both companies to transfer assets on the operational level.

Earlier on 14 September, there were reports that the sale of the promoter stake in Cipla Ltd. is in limbo as potential buyers were unwilling to accept the Rs 1.09 lakh crore ($13.1 billion) valuation that members of the founding family were targeting for the pharma company.