India-based Cipla has completed its acquisition of South Africa-based Cipla Medpro. The proposed acquisition was first announced in February 2013; Cipla offered to acquire 100% of the ordinary shares of Cipla Medpro for ZAR 10.0 per share. This valued the South African firm at around ZAR 4.5bn (approximately US$512mn).
The acquisition ends what has been a troubled year for Cipla Medpro. In August 2012, the company announced that it had suspended and was investigating its then-CEO over allegations regarding his professional conduct. The CEO subsequently announced his resignation in October. The turmoil had added fire to speculation that Cipla would intervene to shore up Cipla Medpro; the acquisition offer thus came as little surprise and arguably some relief for Cipla Medpro.
Cipla and Cipla Medpro have a long-standing symbiotic relationship, with the Indian firm having been a core business partner since Cipla Medpro was founded in 1993. Cipla is the principal supplier of pharmaceutical products to Cipla Medpro. The acquisition aims to strengthen Cipla Medpro's position in the South African pharmaceutical market by giving it more access to Cipla's product portfolio and technological abilities.
In accordance with the acquisition, Cipla Medpro's shares on the Johannesburg Stock Exchange were suspended on July 8. They were subsequently delisted on July 16.