Torrent Pharma Holding Talks With Apollo To Borrow Roughly $1 Billion For Cipla Bid: Report

India's Torrent Pharmaceutical is reportedly in preliminary talks with Apollo Global Management to secure a loan of approximately $1 billion to help fund a planned bid for Cipla, according to a media report citing two people familiar with the matter.

Torrent is hoping to secure roughly $3 billion to $4 billion in financing for the bid for its much bigger rival, they said. According to Bernstein analysts, a deal for about 60% of India's number three drugmaker could be worth $7 billion - potentially India's largest pharma deal to date.

Torrent has been holding talks with CVC Capital Partners and Bain Capital who can probably become equity partners in a consortium and jointly contribute around $1.5 billion to the deal, sources told Reuters.

Cipla's founding family is looking to offload their 33.4% holding, according to sources, and a bid for that amount would give way to an open offer for another 26% as per Indian regulations.

Meanwhile, Blackstone has also shown interest in bidding for Cipla, said sources.

Apollo is mulling buying a small part of the Cipla founding family's stake but a final decision will depend on how talks advance with Torrent, reported Reuters quoting a person who declined to be identified as the talks were private.

However, both Apollo and Torrent, have so far not commented on the matter.

Torrent, whose market cap is 56% lower compared to Cipla, sells medicines related to diabetes, pain management, and oncology and is present in over 40 countries.

As per the report, foreign banks, including Morgan Stanley and Barclays, are in talks with Torrent to extend loans and arrange financing for the deal.

Cipla has a presence in 80+ countries and provides over 1,500 products across various therapeutic categories in 50+ dosage forms. The pharma company is involved in the manufacturing of anti-allergy drug Cetirizine and generic versions of respiratory drugs Advair and Albuterol.