Another chapter is being added to the story of overseas acquisitions by Indian pharma companies. Torrent Pharmaceuticals, the flagship company of Ahmedabad-based Torrent group, is close to acquiring a German company engaged in generic drugs business, for a consideration of over Rs 300 crore.

According to sources close to the development, a deal between the two companies is expected to be signed shortly. The company, however, declined to comment.
Torrent, like other Indian pharma firms that recently made acquisitions in Europe , has identified the European market as one of its focus areas for tapping generic opportunities.

As the international generic market is expanding as a result of many blockbuster drugs going off patent in '05, the company is looking at international generics as the future growth engine.

Torrent Pharma has also floated a subsidiary company, Torrent Pharma GmbH, in Germany , to strike an alliance and partnership with large generic players for select molecules and providing them with product registration dossiers.
The German acquisition is also expected to be made through this subsidiary.

Interestingly, in the recent past, many Indian pharma companies have acquired European ones.
Wockhardt acquired UK-based generic drugs manufacturer CP Pharmaceuticals for Rs 83 crore (10.85m pounds) in an all-cash deal; Zydus Cadila acquired the formulation business of Alpharma of France for a consideration of Euro 5.5m, and more recently, Ranbaxy acquired the French generic drug company RPG Aventis for around $70m.

"There is indeed an observable trend in these developments. To ascertain the factors driving this trend, one may need to take a close look at the underlying assumptions and motivations of the acquiring companies," an analyst said.

According to the analyst, though the European market is still not as big as the US market, it is expected to become substantial, in terms of both quantity and value, over the next few years.

The growth is already beginning to take off as more and more European governments are banking on generics to contain their health-related expenditure.
Moreover, the European market, which is growing almost as fast as the US market, is relatively less cluttered.

These markets offer an opportunity to build critical mass faster through a well-planned acquisition strategy. Taking this route can prove to be a significant step towards fulfilling their global aspirations, the sources said.