Shasun Pharmaceuticals to merge with Strides Arcolab

Shasun Pharmaceuticals to merge with Strides Arcolab

5:16 share swap ratio proposed for the merger

Chennai-based Shasun Pharmaceuticals will amalgamate with Bangalore-based Strides Arcolab to form a vertically integrated larger pharma company.

The proposal was approved the boards of the two companies on Monday.

Under the scheme of amalgamation, Shasun shareholders will get five Strides shares for every 16 shares held by them in Shasun.

Shasun shareholders will own 26 per cent of the combined firm.

The deal will see the creation of a combined entity with a revenue of over Rs.2,500 crore.

The combined entity will also figure among the top 15 listed pharma firms.

Based on the share swap ratio, Shasun is valued at Rs.1,230 crore based on its closing price of Rs.195.75 on Monday.

Pipeline of products

In a joint statement, the two companies said the combination would result in significant de-risking of operations with the combined entity having 12 manufacturing facilities and a pipeline of over 100 products.

Strides, it may be recalled, sold its injectable drugs business to Mylan for $1.6 billion last year.

In July, it acquired 74 per cent stake in Bafna Pharmaceuticals’ branded generic unit for Rs.48.1 crore.

Value creation

“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,” said Arun Kumar, Founder and Group CEO of Strides Arcolab, in a statement.

“Strides and Shasun bring complementary strengths and shared values of developing products and market opportunities across geographies, and the combination accelerates both scale and scope,” a release quoted Abhaya Kumar, CEO and Managing Director of Shasun, as saying.

Post the merger, the present promoters of Shasun will be categorised as promoters of the combined entity, along with the existing promoters of Strides. The transaction is expected to close by June 2015. It is, however, subject to all regulatory approvals.

SeQuent Scientific, a group company of Strides Arcolab, has a 5.82 per cent stake in Shasun.

Shares of Strides Arcolab rose 9.20 per cent to close at Rs.701.95 on Monday. Shasun shares were down marginally to close at Rs.195.75 on the BSE..

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Printable version | Oct 17, 2018 7:39:20 AM |

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