Announcing its first overseas acquisition, Zydus Cadila signed a definitive agreement to acquire the formulation business of Alpharma France ~ the French affiliate of the world's fourth largest generics company. This strategic acquisition opens up the gateway to the European generics market, which is the second largest market for generics in the world after the U.S.

Zydus Cadila has acquired 100% stake of Alpharma SAS France from its promoters Alpharma. The acquisition valued at Euro 5.5 million is being made through Zydus International Pvt. Ltd., an overseas wholly-owned subsidiary of Cadila Healthcare Ltd which is also the investment holding company of the Group.

Besides the access to the more established generics markets of the UK, Germany and the Netherlands, Zydus Cadila now gains a significant presence in France which is an emerging market where the market for generics is estimated to grow to 1.2 billion Euro by 2005.

Speaking on the acquisition, Chairman and Managing Director of Zydus Cadila Mr. Pankaj R. Patel said, "Our strategy over the last few years has been to identify and exploit opportunities that can make a significant difference to our top line and bottom line growth. This acquisition unlocks great value for the group as we are now better placed to cater to the European generic market. Our goal is to tap the opportunities for growth in the generics market by establishing ourselves in the European markets over the next decade. The acquisition of Alpharma France takes us closer to this goal."

The acquisition brings in a large product basket, which is a crucial factor in the generic business. Alpharma has 110 product registrations in France and is amongst the top six companies with the most number of product registrations. With 20 more generics under registration, the company has a distinct advantage for entering the top league. The company also has a range of branded generics, which currently contribute approx. Euro 6 million to Alpharma's French operations. The generics will be manufactured at Zydus Cadila's state-of-the-art manufacturing premises at Moraiya.

The French pharmaceutical market as a whole is the second largest in Europe, which is valued at over 17 billion Euro. The French generics market which currently stands at 520 mio Euro, has a tremendous growth potential. With recent steps taken by the French government to promote generics, the market is expected to grow by 33% in 2003-4. With the acquisition of Alpharma France, Zydus Cadila will be able to stamp its presence in a hitherto untapped generics market.

With revenue of US $ 1.1 billion, Alpharma Group, the promoter of Alpharma France, is currently the 4th largest generic company in the world. Listed on NYSE (New York Stock Exchange), Alpharma Group has more than 4,900 employees in 28 countries with operations in more than 60 countries.

With a turnover of more than Rs. 1000 crore, Zydus Cadila is India's fourth largest pharmaceutical company. On a path of accelerated growth, the group has been looking at long term revenue growth through both organic and inorganic route. Consolidating its operations, the group acquired Recon Healthcare in 2000, German Remedies Ltd., a listed MNC, in 2001 and Banyan Chemicals Ltd., a company with an USFDA approved API plant in 2002. The group employs 6000 employees and has business operations in more than 40 countries worldwide.