Johnson & Johnson (J&J), the Rs 180 crore pharma major, will pay Rs 21 crore for buying Coldarin, the cough and cold brand, from Knoll Pharma, while Reckitt & Colman will buy Burnol from Knoll for Rs 12 crore.
Top industry sources say the deal for the sale of both brands are more or less completed, while Knoll retains the antacid brand, Aciguard.
J&Js purchase price of Rs 21 crore is one of the highest amounts offered by any company for an OTC brand.
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SmithKlines buy-out of Crocin in 1995 for Rs 42 crore still ranks first among major OTC deals. Knolls sale of the two brands was being lead managed by DSP Merril Lynch.
Sources say the other brands of Knoll will not be sold now as the bids offered are not very attractive. Knoll is likely to use the sale proceeds from the two brands to infuse more value into these brands. After that they will be offered for sale again.
The buy-out of Coldarin will open another front for J&J in its eight-year long war with Procter & Gamble.
The two are engaged in an eyeball-to-eyeball confrontation in the santiary napkin market. Here, P&G has stolen a march over J&J.
Currently, the cough and cold segment is dominated by P&G with its Vicks Action 500 holding a 37 per cent market share, followed by Actified of Glaxo with 28 per cent and Coldarin with 15 per cent.
For Reckitt, Burnol will add to its portfolio which also includes Dettol. After the buy-out, Burnol will be distributed by Reckitt Piramal, the new joint venture formed with Nicholas Piramal for distribution.
Knolls invitation had excited interest among a large number of pharma multinationals. Smithkline Beecham, Parke Davis, Reckitt & Colman, P&G and Bayer had put in their bids for buying the brands.
Along with the brands, Knoll had also offered its 100 per cent subsidiary Beem Healthcare, which distributes the OTC products.
Now Beem will be retained for marketing the other remaining brands.