The Mukesh Ambani dominated Reliance Industries Limited is planning to acquire the Chennai-based Netmeds.com which is an online pharmacy marketplace, which in turn could start a trend of the merger of the Indian online pharmacy space with the support of global investors to the winners in this fast-growing structure.
Speculations are going on that Reliance Industries Limited is offering $120 million for the acquisition of Netmeds, and if the speculations are correct, then this deal can encourage the options for merger and acquisitions between Bengaluru-based Medlife and Mumbai-based PharmEasy.
A source who knows about the details of the deal said, “PharmEasy has always been strong in the western part of India, while Medlife has had a good presence in the South. So, consolidation makes sense, because you need deep pockets to compete with Reliance.”
Temasek, CDPQ and Orios Venture Partners are backing PharmEasy and speculation are also going about that PharmEasy can acquire its rival Medlife at an estimated value of $120-150 million in a primarily stock deal.
TPG is a US-based private equity giant, which has massive investments in healthcare companies, and several other major foreign investors may invest their money into the combined entity if the deal materializes.
An Investment Banker said on the condition of anonymity, “Like what took place in the horizontal e-commerce space, where Flipkart and Amazon came out as winners while others fell by the wayside, the same will take place in the online pharma space. Reliance’s entry will give a difficult time to the other players.”
Many sources also hinted about the Swasth Alliance is also seen as a third faction which could come as a winner in the Indian online pharma sector along with the PharmEasy-Medlife and Reliance-Netmeds combination.
The Covid-19 pandemic has sought fears in the heart and mind of customers as they are fearing to visit medical stores and this situation is providing a chance to these online pharmacy marketplaces to expand their customer base. So these consolidations could help them to capture the bigger market size and result in making them winners of this fast-growing structure.
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