May 20 :     Putting an end to speculation over the last one year, Dr Reddy's Laboratories Ltd (DRL) today announced that Cheminor Drugs Ltd, a group firm, is being merged with itself. DRL has informed the stock exchanges that its board will meet on May 31 to consider the merger proposal and swap ratio. Pharmaceutical analysts, who were not surprised by the merger announcement, said the move made immense sense, particularly at a time when DRL is planning an American Depository Shares (ADS) offering this year. Though Cheminor is largely into bulk drugs and formulations, around 74 per cent of it's turnover is accounted for by exports. The company is also known to be strong in the generic market (off-patent products that are not sold under any brand name) and the company has filed six Abbreviated New Drug Applications for which exports are expected to commence from the next fiscal year. 'With Cheminor's strong export focus and other advantages, the merger would make a lot of sense as DRL can now get a much better valuation in the US markets,' a leading pharmaceutical analyst said. In April last year, group chairman Anji Reddy indicated that the two firms would be merged in two years' time. While DRL posted sales of over Rs 603 crore for the year ending March 2000, the sales of Cheminor for the same period stood at Rs 215 crore. The net profit for DRL was Rs 60 crore, while that of Cheminor stood at Rs 27.8 crore. Both the companies declared a 30 percent dividend. Cheminor, which is a supplier of intermediates, generics and bulk drugs to several countries, manufactures drugs like Ibuprofen, Ranitidine among others. The company, which was incorporated in December 1981 as a private limited company, has an alliance with Schein Pharmaceuticals of the US. Schein is one of the largest generic manufacturers in the US.