Aurobindo Pharma’s share down by more than 2%, after company makes bid for Zentiva

Mumbai/Prague, Aug 20, 2025 — According to reports, has made a bid in the range of $5 – 5.5 billion for acquiring Zentiva. Zentiva is a Prague based maker of generic drugs. After these  reports came, Aurobindo Pharma’s share is down today, 20^th August. At 11:25 p.m. Indian standard time, the stock price is down by 2.83%, trading at Rs 1058.90. Benchmark Nifty 50 index is up by 0.16% at this time.

The acquisition , if it happens, will result in Aurobindo pharma incurring debt of around $4.75 billion. Many shareholders are generally wary of mergers & acquisitions. This, because a large number of them fail in realizing the synergies that are expected to be realized at the time of the deal.

Aurobindo is pitted against U.S. private equity group GTCR, which is among the few serious players left in the fray. Binding bids have already been made, and the talks have reportedly reached a stage where pricing is no longer on the table, setting the stage for an official announcement in two to four weeks’ time.

Strategic and Financial Implications

The transaction would give Aurobindo a significant boost to its presence in Europe – most notably in Central and Eastern Europe, including the Czech Republic, Romania, and Slovakia, markets more and more open to biosimilars due to crucial patent expirations.

Zentiva’s 2024 financials report revenues of €1.7 billion (about $2 billion) and EBITDA of €400 million ($467 million), with a presence in 30 countries.

To finance the deal, Aurobindo has arranged for a $4.75 billion bridge loan from MUFG and will utilize another $800 million of internal accruals.

In the face of near-term headwinds, the deal reflects Aurobindo’s determination to move towards a more stable and resilient European business model to offset erosion of pricing in the U.S. generics market. The Eastern European model enjoys government-driven bulk procurement and provides more stable returns.

Aurobindo’s overall business numbers have also been robust: in Q1 FY26, its formulations business in Europe increased by 18% year-on-year to ₹2,338 crore (~$290 million), while its US formulations revenue fell marginally by 1.9% to ₹3,488 crore.

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Source: NSE