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Aurobindo Pharma Exclusive: CFO says Zentiva fits into strategic plans, but talks in 'early stage'
Aurobindo Pharma Exclusive: CFO says Zentiva fits into strategic plans, but talks in 'early stage'
About this update from Zentiva A.s.
Aurobindo Pharma Ltd. has entered into a Non Disclosure and Confidentiality agreement for its potential acquisition of Zentiva and talks are currently at a "very early stage," CFO Santhanam Subramanian confirmed exclusively to CNBC-TV18 on Thursday, August 21.Subramanian said that while Zentiva fits into Aurobindo Pharma's strategic plans as it is based out of Europe, it is too premature to comment on a possible outcome due to the early stages of the discussion. The Aurobindo CFO did highlight that in case a deal fructifies, the announcement can be made in the next two months.Aurobindo Pharma's shares fell 4% on Wednesday after reports indicated that the company is set to acquire Zentiva at a price between $5 billion to $5.5 billion. In response to that ET report, Aurobindo replied to the exchanges that they keep pursuing growth opportunities and will make appropriate announcements as and when such a situation arises.Aurobindo Pharma currently has $140 million worth of cash on the books and 75% of its business comes from the US and European markets.Subramanian said that while there is nothing wrong in looking at a large entity for an acquisition, they will be mindful of not overpaying for any deal. He added that Aurobindo will look at paying a single-digit multiple for any deal that they do.The CFO also addressed concerns around a potential rise in debt in case the acquisition does materialise. He mentioned that debt is not a concern for them as the continue to generate healthy cash flow every quarter.This is a developing story and will be updated with more.