Dr. Reddy's New Corporate Identity
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Case Details:
Case Code : BSTR013
Case Length : 9 Pages
Period : 2000-2001
Organization : Dr. Reddy Labs, American Remedies Ltd, Cheminor Drugs Ltd.
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Healthcare & Pharmaceuticals
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Background Note Contd...
Analysts felt that DRL had world-class expertise in the development and manufacture of pharmaceutical intermediates, bulk actives and finished dosage forms.
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This expertise seemed to enable DRL to provide high-quality and cost-effective pharmaceutical products to international markets including Europe, Japan and the US.
In 1999, DRL acquired a controlling stake in ARL. DRL purchased a 45% stake in ARL for about Rs.800 million at Rs. 175 per share. The acquisition brought with it, key brands like Mucolite, Antoxid, BioE, Becozine and Optisulin, which accounted for 60% of ARL's sales.
ARL also owned two facilities'one at Chennai and the other at Pondicherry.
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Commenting on the ARL acquisition, Dr. Reddy said, "The American Remedies acquisition is an excellent value creation opportunity for DRL, given their strong marketing thrust and innovative product portfolio.
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The company has strong systems and a top-class field force. We will be able to reap significant synergy gains by co-promoting their neutraceuticals4 with our mainline products. For instance, ARL's Antoxid brand which is the market leader in its category, will be an excellent supplement to our own leading position in cardio therapy." In late 1999, ARL was merged with DRL at a swap ratio of one DRL share for every 12 shares of ARL. In May 2000, CDL merged with DRL making DRL India's third largest pharmaceutical company. Said Dr. Reddy, "The merger gives me a feeling of having arrived. We are in the big league now, third only to Ranbaxy and Glaxo. So far, we enjoyed the leadership for basic research, now we have the size as well..." |
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