Sun Pharma Expands African Footprint with Acquisition of Valstar and Kemipharm

Sun Pharmaceutical Industries Limited (Sun Pharma) announced a strategic move to bolster its presence in Africa on May 04, 2024. The company entered into an agreement to acquire 100% of the shares of Valstar S.A. (Valstar), which will also indirectly grant Sun Pharma complete ownership of Valstar’s subsidiary, Kemipharm S.A. (Kemipharm).

Expanding Manufacturing Capabilities

This acquisition strengthens Sun Pharma’s manufacturing footprint in Africa. Kemipharm operates a tablet and capsule manufacturing plant strategically located in Casablanca, Morocco. This facility will serve as a springboard for Sun Pharma to expand its production capacity and cater to the growing pharmaceutical needs of both the Moroccan market and other African nations.

Enhanced Product Portfolio

Beyond the manufacturing advantages, the acquisition presents Sun Pharma with access to Kemipharm’s registered and in-registration product portfolio. This valuable portfolio holds significant business potential, allowing Sun Pharma to broaden its product offerings and cater to a broader range of patient needs within the African market.

Transaction Details

The acquisition is subject to approval by the Competition Council in Morocco to ensure compliance with merger clearance regulations. Assuming all necessary approvals are obtained, and customary closing conditions are met, the transaction is expected to be finalised by June 2024.

The total enterprise value of the acquisition is capped at USD 31 million. This includes an upfront payment of USD 29 million, with the remaining USD 2 million potentially disbursed as deferred consideration. The final upfront payment amount may be subject to customary adjustments at closing.

Strategic Investment for Continued Growth

Sun Pharma’s acquisition of Valstar and Kemipharm represents a strategic investment that aligns with its commitment to expanding its global reach and presence in high-growth markets like Africa. The combined benefits of increased manufacturing capacity, a wider product portfolio, and access to new markets position Sun Pharma for continued success in the dynamic African pharmaceutical landscape.

Looking Ahead

With this acquisition awaiting regulatory approval, Sun Pharma is committed to becoming a prominent player in the African pharmaceutical market. By leveraging its enhanced capabilities and product offerings, Sun Pharma is well-positioned to improve access to essential medicines and contribute to the overall healthcare landscape across Africa.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.