Cipla, a leading drugmaker, said Thursday the company's wholly owned subsidiary, Cipla (EU) Limited, U.K. has entered into a definitive agreement to acquire a 51% stake in Quality Chemicals, Uganda (QCL) from the existing shareholders of QCL.

As per the agreement, the cash consideration for 51% stake is payable in tranches with approximately USD 8 million payable upfront on completion and 5 equal installments of USD 4.41 million payable at annual intervals thereafter. Total consideration works out at USD 30.05 million.

QCL was incorporated in the year 1997 and is engaged in the business of import and distribution of pharmaceutical and consumer products. QCL also holds a 22.05% stake in the company's subsidiary in Uganda, Cipla Quality Chemical Industries (CQCIL).

Consequent to this acquisition, company's effective stake (held through its subsidiaries) in CQCIL will increase from the existing 51.05% to 62.30%. This acquisition will further strengthen the company's overall presence in the African market, it opined.

The turnover of QCL for the financial year ending Dec 2012, Dec 2013 and Dec 2014 was Ugandan Shilling 15.76 billion, Ugandan Shilling 17.02 billion and Ugandan Shilling 14.85 billion respectively.

The transaction is expected to be completed by end of July 2015, subject to completion of certain conditions precedent.  

Shares of the company declined Rs 13.65, or 1.98%, to settle at Rs 674.40. Total volume of shares traded on the bourses today was lower by 15.44% to 1,753,093 compared with 22-day average volume of 2,073,216 (Thursday).