New Delhi: In another instance of consolidation in Indian pharma sector, generic drugmaker Strides Arcolab Ltd and Chennai-based Shasun Pharmaceuticals today announced their merger that will create an entity among the top 15 listed domestic drug makers with a turnover of over Rs 2,500 crore.
"The Board of Directors of both the companies have approved a scheme of amalgamation between the two companies," Strides Arcolab and Shasun Pharmaceuticals said in a joint statement.
Shasun will amalgamate with Strides in an all-stock transaction. Shashun shareholders will receive 5 equity shares of Strides for every 16 shares held by them in Shasun, the statement added.
Based on the exchange ratio, Shasun shareholders will own 26 per cent of the combined entity. The current promoters of Shasun will, post the approval of the merger, be categorised as promoters of the combined entity, along with the existing promoters of Strides.
"The combination creates a vertically integrated pharma company of scale with strong presence in front-ended regulated markets finished dosages, emerging markets branded generics, institutional business, active pharmaceutical ingredients and contract research and manufacturing services," it said.
Commenting on the development, Strides Founder and Group CEO Arun Kumar said: "Today's proposed combination with Shasun accelerates our strategy and growth prospects by creating a larger scale, fully integrated, leading Indian pharma company with multiple growth drivers and synergies that will allow for enhanced profitability and more efficient use of our combined infrastructure and enhanced value creation opportunities for the combined shareholder group".
Shasun CEO and Managing Director Abhaya Kumar said: "We are confident that the vertically integrated new combination will deliver further additional value in the near term for all stakeholders above and beyond the strong gains we have achieved to date on our own".
In April, Sum Pharma had announced a USD 4 billion deal to acquire Gurgaon-based Ranbaxy Laboratories.
As part of the merger deal between Strides Arcolab and Shasun, promoters of Strides and the promoters of Shasun will have the right to nominate non independent directors in proportion to their inter-se shareholding in the combined entity.
The merger would be "subject to various statutory and regulatory approvals". The appointed date for the Scheme of Amalgamation is April 1, 2015.
The combined entity would significantly enhance finished dosages portfolio in niche and complex domains with a pipeline of over 100 products and accelerates product filings with a combined R&D strength of over 400 personnel, it added.
Strides, a Bangalore-based firm develops and manufactures IP-led niche pharmaceutical products. It has 8 manufacturing facilities presence in more than 75 countries.
Incorporated in 1976, Shasun is a global supplier of development and manufacturing services for intermediates, API (active pharmaceutical ingredients) and formulations to the pharmaceutical industry.
