The deal will see Mumbai-based Sun pay $24m (€22m) for 85% of Biosintez, which is focused on the supply of drugs and active pharmaceutical ingredients (APIs) to hospitals in Russia and the CIS region.
Aalok Shanghvi, head of emerging markets at Sun, “This transaction gives us access to local manufacturing capability across multiple dosage forms in Russia, enabling us to serve the Russia pharmaceutical market more effectively.”
Sun declined to comment further.
The takeover, which is expected to complete by the end of the year subject to regulatory approval, will also see Sun take on debt of approximately $36m.
Biosintez has a manufacturing facility in Penza, a city 700km southeast of Moscow, which produces drug ingredients and finished products.
Companies that want to sell pharmaceutical in the country must produce them locally under the Pharma 2020 that was launched in 2011 by Russian President Vladimir Putin when he was Prime Minister.
The idea was that Russia would be able to produce 50% of all the drugs it uses - and 85% of the medicines it deems essential - by 2020.
Putin restated the aim during the Russian Popular Front’s forum for Quality and Affordable Medicine in September last year.
“We expect by 2018 to achieve such a level of the domestic pharmaceutical industry development that will ensure us with approximately 90% share of locally manufactured drugs in the structure of internal drug consumption,” he said (transcript, in Russian, here).