Biocon arm plans to acquire Viatris' biosimilars assets; stock falls 8%
The companies will also enter into a transition services agreement. Viatris will provide certain transition services, including commercialization services for an expected 2-years
 "Biocon Biologics")
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Shares of Biocon slipped 8 per cent to Rs 363.45 on the BSE in Monday’s intra-day trade after Biocon Biologics (BBL), the subsidiary of the company, announced to acquire Viatris’ biosimilars assets for up to $3.335 billion in stock and cash.
Viatris will receive cash consideration of $2 billion on closing of the transaction and up to $335 million as additional payments expected to be paid in 2024. Additionally, upon closing of the transaction, BBL will issue $1 billion of compulsorily convertible preference shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9 per cent in the company, on a fully diluted basis.
The transaction is expected to close in second half of 2022 (H2-2022). The companies will also enter a transition services agreement, in which Viatris will provide certain transition services, including commercialization services for two years.
That apart, Viatris will also pay $50 million to BBL to fund certain capital expenditures. The cash payment of $2 billion will be funded by $800 million raised through equity infusion in BBL and the remainder by debt, additional equity or a combination of both.
"This transaction accelerates BBL’s direct commercialization strategy for its current and future biosimilars portfolio. Viatris to provide commercial and other transition services for an expected period of two years to ensure continued customer service and smooth transition to BBL. The deal will be value accretive to Biocon and BBL shareholders and is structured as part-cash, part-equity," the company said in a press release.
Viatris will receive cash consideration of $2 billion on closing of the transaction and up to $335 million as additional payments expected to be paid in 2024. Additionally, upon closing of the transaction, BBL will issue $1 billion of compulsorily convertible preference shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9 per cent in the company, on a fully diluted basis.
The transaction is expected to close in second half of 2022 (H2-2022). The companies will also enter a transition services agreement, in which Viatris will provide certain transition services, including commercialization services for two years.
That apart, Viatris will also pay $50 million to BBL to fund certain capital expenditures. The cash payment of $2 billion will be funded by $800 million raised through equity infusion in BBL and the remainder by debt, additional equity or a combination of both.
"This transaction accelerates BBL’s direct commercialization strategy for its current and future biosimilars portfolio. Viatris to provide commercial and other transition services for an expected period of two years to ensure continued customer service and smooth transition to BBL. The deal will be value accretive to Biocon and BBL shareholders and is structured as part-cash, part-equity," the company said in a press release.
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Topics : Buzzing stocks Biocon acquisition Market