Drug-maker Cipla has signed an agreement with its Sri Lankan distributor to pick up a 60 per cent stake in a new company that will handle its distribution in Sri Lanka. Cipla will fork out $14 million for a 60 per cent stake in the new entity.

The deal was inked by Cipla (Mauritius) Ltd, a wholly owned subsidiary, and Citihealth Imports (Pvt) Ltd, Cipla’s existing Sri Lankan distributor. The Indian company did not explain the rationale behind the move or its timing.

Cipla, which has operated in Sri Lanka for more than 15 years, is a big player in the market. This acquisition will further strengthen its presence in the country, the company said.

Expanding presence In the recent past, Cipla has moved to ramp up its presence in other markets. Late last year, it picked up 100 per cent in Celeris, its distributor in Croatia, for an undisclosed sum.

Cipla’s Managing Director and global Chief Executive Subhanu Saxena had then said that the move was in line with the company’s ambition to “front-end and establish a platform to market our own products”.

In 2013, shareholders of Cipla Medpro South Africa had also given their thumbs-up to Cipla’s $488 million offer to acquire a 100 per cent stake.

Speaking to BusinessLine last year, Saxena had said that Cipla’s international strategy would see some tweaking, as the company sought to sharpen its focus on fewer, but strategic, partnerships overseas.

The company makes products for about 800 of its partners but will now narrow its focus to key partners, he had said.

Through a combination of partnerships, acquisitions and go-solo strategies, Cipla intends to increase its presence in markets such as North America and Europe, even as it evaluates the road ahead in Japan, China, Brazil, Turkey and Russia, Saxena had said.

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