Nov 30, 2000|
Who’ll take Rhone Poulenc?
With Hoechst Marion’s international parent Aventis’ decision to sell off the company’s 40% stake in its Indian affiliate was announced, there have been a host of bidders for the company. These include multinational companies such as Pharmacia Corporation apart from Indian companies such as Ranbaxy, Wockhardt, Nicholas Piramal and Cadila.
What does this affiliate, Rhone Poulenc India bring to the table? For one it has top of the line brands such as its cough syrup Phensedyl (number two after Pfizer’s Corex), a children’s cough syrup Tixylix, an anti–amoebic Flagyl and an anti–epileptic Gardenil. Secondly, the company has restructured its workforce by reducing its unskilled workers by over 600 people and increased its marketing team by 75 people to 375 medical representatives currently. Third, the company upgraded its Paithan plant (in Maharashtra) by additional investments recently. This helped it reduce the cost of material by nearly 10%. These are the reasons for Indian companies bidding for the company.
Pharmacia, on its part has a presence in India via Monsanto, which is into agrochemicals. As far as the pharmaceutical business is concerned the company has recently established a 100% subsidiary in India. However, it still has to upgrade its distribution network to cover the country. A takeover would help Pharmacia reduce the time to market.
As to the question as to why Aventis wants to sell its stake in the company, the one plausible reason is that Aventis’ pharma operations are prescription led whereas Rhone Poulenc India has over the counter brands such as Phensedyl. Secondly, its French parent (now a part of Aventis) has sold off its older brands and is more interested in therapeutic areas such as oncology where it has got blockbusters such as Taxotere. And finally, there is an overlap in the field force of Rhone Poulenc India and Hoechst Marion. Aventis possibly found it safer to sell the company rather than go through another painful round of restructuring.
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