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Aurobindo Pharma shares surged 5% after reports suggested that Chicago-based private equity firm GTCR is close to acquiring generic drugmaker Zentiva in a deal valued at $4.8 billion.
Zentiva manufactures a wide portfolio of generic and over-the-counter medicines and operates in more than 30 countries.
The deets: this comes after Aurobindo Pharma was previously considered a leading contender for the Zentiva acquisition. GTCR has reportedly outbid rival private equity firms and pharmaceutical companies to become the frontrunner in the race to acquire Zentiva.
Here’s the gist: at first, Aurobindo was seen as a key contender for buying Zentiva, a deal worth $4.8 billion. But such a big takeover would have meant heavy borrowing, high costs, and possible risks. Now, GTCR is likely to win the bid instead, investors believe Aurobindo avoids that financial burden. That’s why the stock is moving up, the market sees it as a positive outcome.
