new Delhi A decade ago, billionaire industrialist Ajay Piramal faced a significant challenge while negotiating with US-based multinational pharmaceutical major Abbott Laboratories to sell his domestic formulation business.
Buyers made excuses to cancel the deal hoping for lower valuations, which Piramal refused.
“I said let it go. Go home. But, it (the deal) happened,” Piramal said on Tuesday at the Mint India Investment Summit 2022, where he was honored with the Deal Maker Hall of Fame.
“If you go through the process correctly, the results will come out. This is my following from the Bhagavad Gita,” Piramal said.
“Sometimes the M&A (Mergers and Acquisitions) processes are lengthy and have ups and downs. During this time, you need to remain still and not make hasty decisions.”
Abbott Laboratories acquired Piramal’s formulations business in 2013 for approximately $3.7 billion, making it one of the largest deals in the Indian pharma sector.
Piramal Group, headed by Ajay Piramal, is a conglomerate with interests in pharmaceutical, financial services, healthcare analytics and real estate.
Last September, Piramal Enterprises Ltd (PEL) had acquired bankrupt Dewan Housing Finance Corporation Ltd (DHFL) by paying cash. 14,700 crore to the creditors as per a resolution plan.
“If you have to create extraordinary value, there are two things (to do). You have to buy something that is imperfect and you have to sell something that is perfect. If we can identify, then value can be created,” Piramal said.
“That is what we have implemented at DHFL and we think we will create value. We see this happening.’ In many businesses in his career, Said said that a large number of acquisition processes – up to 75% – are unsuccessful because of the arrogance of promoters, founders and top executives.
“We have to leave the ego and go to the facts,” he said.
Piramal said that when he sold his domestic pharma business to Abbott, many told him that his identity as an industrialist would be lost as his company was a major player in the domestic market.
“I believe (for) all of us, our identities are not defined by work, it is much more. We as individuals have an identity. If we realize this, we will make the right decisions. and therefore will not rely on businesses for identification.”
Going forward, Piramal hopes to work with the underprivileged, especially the tribals, to raise their standard of living.
“PM (Prime Minister Modi) has identified aspirational districts, 112 of them, where 16% of India’s population lives and only 1.5% of any CSR money is going (into). Most of the government resources do not reach these places.”
“There are 10 crore tribals and they are living in the past. we must do something. That’s what we as a group are trying to do through our foundation.”
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