Business Case Studies & Business Publications

Lupin & Foray into Japan

Jacob, Joshy, Agar...

Case

Lupin & Foray into Japan

Jacob, Joshy; Agarwalla, Sobhesh Kumar; Premchander

IIMA-FA0495 | Published October 27, 2012 | 19 pages Case

Collection: Indian Institute of Management, Ahmedabad

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Learning Objectives

The case described the issues faced by a mid-sized Indian generic pharmaceutical firm, in its attempt to acquire a small unlisted Japanese generics manufacturer. It showcases the strong motivation of a successful emerging market pharmaceutical firm to expand into the developed market, buoyed by its cost competitiveness. The case presents an opportunity to discuss the trade-offs involved with most of the dynamic decisions in a cross-border acquisition, such as estimation of synergies and value, bidding, and financing the acquisition. The case may be used in programmes on valuation, and mergers and acquisitions.

The case provides an opportunity to discuss the valuation and structuring challenges in the acquisition of an unlisted Japanese pharmaceutical company. The major learning objectives which can be achieved through the case include: Valuation of an unlisted firm; Valuation of potential cost savings from moving activities to a cheaper location; Estimation of the cost of capital for cross-border transactions; Post-acquisition integration issues due to differences in regulation, culture and the competitive landscape.