Dr.Reddy's will not bid for Merck

India's Ranbaxy Laboratories and Cipla Ltd are in the race for the generic drugs unit of Merck but Dr. Reddy's Laboratories did not submit a bid, Indian newspapers reported on Tuesday.

The Economic Times reported that Ranbaxy, advised by Goldman Sachs and Citigroup had submitted a bid by Monday's deadline, while Cipla had joined hands with private equity firms for its offer. The paper also quoted banking sources saying the auction was likely to be very competitive and the Indian firms had only a slim chance of winning because of the high price, which one source said had even discouraged some private equity firms.

Merck has said it may sell its generics business to focus on high-margin branded pharmaceuticals and chemicals, and help cut debt from its $13.3 billion Serono acquisition. The business is expected to fetch at least 4 billion euros ($5.3 billion), according to people close to the sale process.

The Mint paper said Cipla was a technical member of a consortium led by Kohlberg Kravis Roberts & Co and Warburg Pincus.

Source: Reuters, Economic Times