Torrent Pharma to borrow near $1B from Apollo for Cipla bid

Torrent Pharmaceuticals is reportedly in talks with Apollo Global Management over a significant loan, potentially up to $1B according to Reuters. The reason behind this? Torrent has its sights set on a major acquisition - their competitor, Cipla.

• What's Happening? Torrent Pharmaceuticals is planning to raise between $3B and $4B with the goal of making a bid for Cipla. According to Bernstein analysts, the acquisition of a 60% share in India’s third-largest pharma company, Cipla, could rack up a bill of $7B. This has the potential to go down as the largest pharma deal in Indian history.

• Who's Involved? Torrent isn't going at it alone. Private equity firms such as CVC Capital Partners and Bain Capital are allegedly being wooed to contribute around $1.5B to the cause. Banks such as Morgan Stanley and Barclays are also in talks with Torrent.

• Details: The founding family of Cipla, with a 33.4% stake, appears ready for an auction, which could potentially lead to a rush of buyers vying for an additional 26% stake as per Indian regulations.

• Additional Bidders: Blackstone and Apollo is also reportedly showing interest in Cipla. Apollo, having set up shop in Mumbai just last year, is fully invested in the Indian market, expressing confidence in the financial stability of both Cipla and Torrent.

• Background: Cipla, having a near $12B market cap, is notable for producing the anti-allergy drug Cetirizine and generic versions of respiratory drugs Advair and Albuterol. Torrent, although smaller in size (56% lower market cap), nevertheless holds significant sway in the fields of diabetes, pain management and oncology medicines, making its mark in over 40 countries.

These are speculations at the moment, but the pharmaceutical industry is expected to experience significant developments.