Cipla to acquire 51% stake in Uganda's Quality Chemicals

NEW DELHI: Drug major Cipla has inked a pact with Uganda's Quality Chemicals to acquire majority stake in the Africa-based firm for a total consideration of over USD 30 million (around Rs 190 crore).

Cipla (EU), a wholly-owned subsidiary of the company, has entered into a definitive agreement to acquire a 51 per cent stake in Uganda's Quality Chemicals Ltd (QCL) from its existing shareholders, Cipla said in a statement.

As per the agreement, the cash consideration for 51 per cent stake is payable in tranches with around USD 8 million payable upfront on completion and 5 equal installments of USD 4.41 million payable at annual intervals thereafter, it added.

QCL was incorporated in the year 1997 and is engaged in the business of import and distribution of pharmaceutical and consumer products.

"This acquisition will further strengthen the company's overall presence in the African market," Cipla said.

The turnover of QCL for the financial year ending December 2014 stood at Ugandan Shilling 14.85 billion respectively.

The transaction is expected to be completed by end of July 2015, subject to completion of certain conditions precedent.

Cipla shares today ended at Rs 674.05 apiece on the BSE, down 0.05 per cent from previous close.