Here’s why Aurobindo Pharma shares jumped 6% on Thursday

Shares of Aurobindo Pharma Ltd. settled 6% higher on Thursday, September 11, after reports said that Chicago-based private equity firm GTCR is close to acquiring generic drugmaker Zentiva in a deal valued at €4.1 billion ($4.8 billion).GTCR has reportedly emerged as the frontrunner to buy Advent International-owned Zentiva, after outbidding rival private equity firms and pharmaceutical companies.

The deal has been finalised and is expected to be announced within the next few days, according to people familiar with the matter.

Aurobindo Pharma was previously considered a leading contender for Zentiva.On August 22, the company had told CNBC-TV18 that discussions were still at a very early stage and that Zentiva fit its criteria for inorganic acquisitions. However, management had emphasised that it was too early to comment on any potential deal.

Aurobindo also reiterated that it remains on the lookout for both organic and inorganic growth opportunities, while being mindful of investor concerns and committed to not overpaying for any acquisition.

Advent International acquired Zentiva from French drugmaker Sanofi for €1.9 billion in 2018.

Zentiva manufactures a wide portfolio of generic and over-the-counter medicines and operates in more than 30 countries with a workforce of over 5,000 employees, according to its website.