Shasun Pharma gets Madras HC nod for scheme of amalgamation with Strides Arcolab

Merger of two companies will create a Rs 2,500 crore entity

Don't want to miss the best from Business Standard?

Shasun Pharmaceuticals today said that the Madras High Court has sanctioned the Scheme of Amalgamation with Strides Arcolab Ltd pursuant to its order dated June 16, 2013.

The Scheme of Amalgamation will be effective on receipt of the approval from the High Court of Bombay, Foreign Investment Promotion Board and other approvals as may be required and filed a copy of the order of High courts with respective Registrar of Company, according to Shasun Pharmaceuticals announcement to BSE.

In March, the Competition Commission of India (CCI) has issued its approval for the proposed merger of drug manufacturers Shasun Pharmaceuticals Ltd and Strides Arcolab. The merger was announced last year.

Post combination, Strides will be the surviving entity and in consideration of the proposed combination, the existing shareholders of Shasun will become the promoters of Strides.

The Strides is engaged in the formulations as as the biotech business,however, the biotech business of Strides is in the development stage and at present, there are no revenues from this business. On the other hand, Shasun is engaged in formulations, Active Pharmaceutical Ingredients, which are the primary inputs in the manufacturing of drug formulations, Contract Research and Manufacturing Services (CRAMS) and the biotech business.

Shasun has transfered its domestic formulations business to Alchemist Ltd in 2014, but retained 27 per cent ownership/financial interest in the formulation interst in the formulations business transferred to Alchemist Ltd. The CCI observed that Strides and Shasun Pharma has overlaps only in six formulations and the marketshare of these six formulations in the market is insignificant and is unlikely to raise any competition concerns.

Only three APIs of Shasun have potential usage for Stride's - ibuprofen, tenofivir and nizatindine and there are other suppliers for these APIs.

Pursuant to the scheme of arrangement, each equity shareholder of Shasun will be entitled to receive 5 equity shares of Strides for every 16 equity shares held by it in Shasun. Based on the Exchange Ratio, Shasun shareholders will own 26 per cent of the combined entity.

The merger of the two companies would make the merged entity into top 15 list of Indian pharma companies with a turnover in excess of Rs 2,500 crore.