India's Torrent Pharmaceuticals is in early discussions with Apollo Global Management to secure a loan of up to $1 billion for financing its planned bid for Cipla, a significant pharmaceutical company in India. Torrent aims to secure approximately $3 billion to $4 billion in financing for this bid, which could be valued at up to $7 billion, making it potentially the largest pharmaceutical deal in India's history, according to analysts at Bernstein.
Torrent has also engaged in talks with potential equity partners, including CVC Capital Partners and Bain Capital, who may collectively contribute as much as $1.5 billion to the deal. The founding family of Cipla, which holds a 33.4 per cent stake, is reportedly interested in selling their shares, triggering an open offer for another 26 per cent as per Indian regulations.
Additionally, Blackstone has expressed interest in bidding for Cipla. Apollo Global Management is considering purchasing a portion of the Cipla founding family's stake, but this decision depends on the progress of discussions with Torrent. Both companies, Apollo and Torrent, have strong financial positions, and Apollo is particularly bullish on its Asia strategy, with a focus on India.
Neither Apollo nor Torrent has officially confirmed their interest in Cipla, and Cipla and Blackstone have not commented on the potential deal. Apollo Global Management, a major asset manager, had approximately $438 billion in credit and $101 billion in private equity assets under management as of March 2023. They established an office in Mumbai recently and have issued loans to various entities in India, including Mumbai International Airport and JSW Cement.