Strides Arcolab Ltd. and Shasun Pharmaceuticals Ltd. on Monday announced that they have decided to amalgamate.
Under the deal, Shasun “will be amalgamated with and into Strides. Shasun shareholders will receive five (equity) shares of Strides for every 16 shares held by them in Shasun.”
The move will result in Shasun shareholders owning 26 per cent of the combined entity, and will create a vertically-integrated pharma company with multiple revenue streams. Significant synergies in operations and cost savings through economies of scale are expected as a result of the merger.
In a press release, Strides Arcolab, which also made a filing to the Bombay Stock Exchange, said a scheme of amalgamation between the two companies has been approved by the Board of Directors of both companies.
“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,” the release from Strides said. The scheme of amalgamation is subject to statutory approvals, from shareholders to RBI. The transaction is expected to close by June 2015.
