Drug firm Strides Shasun today said it has agreed in principle with Canada's Apotex to merge their business operations in Australia.
The transaction is subject to definitive agreements between the parties, satisfactory due diligence, customary closing conditions and statutory approvals, including approval of Australian Competition and Consumer Commission (ACCC), Strides Shasun said in a statement.
The arrangement would help Bengaluru-headquartered Strides, which will have a controlling stake in the merged entity, to move to a leading position in the Australian market, it added.
Strides is currently one of the leading generic players in the Australian pharmaceutical market and runs its business under the Arrow brand. Apotex is also a leading player in the market.
"Once complete, our merged operation will continue to provide all of the Arrow and Apotex brands that our customers have come to know and trust, and further enhance our customer service and continuity of supply, to better help pharmacists grow their businesses," Arrow Chairman Dennis Bastas said.
Apotex Australia CEO Roger Millichamp said that both companies are currently in a strong commercial position, but will be better positioned to meet the future challenges of the Australian pharmaceutical industry following the merger.
"The proposed merger will take the best of both companies, optimise our shared cost base, and maintain the viability of our operations through more effective delivery of medicines and services to consumers and patients," he added.
As per the initial deal framework, both Strides and Apotex business will be run independently under the brands Arrow and Apotex respectively and continue to enjoy preferred partner relationship with their respective wholesalers.
The merged business will continue to be supported by Strides' and Apotex's manufacturing facilities and would have around 3,200 first line pharmacy accounts.
The merged business will be led by Bastas, Millichamp and Andrew Burgess (Arrow CFO). bringing together Australia's most experienced management team with in-depth knowledge of the Australian generics market.
Besides, the hospital business of Apotex will not form part of the merged entity.
Strides Shasun shares were trading 2.30 per cent up at Rs 565 on the BSE.
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