Bio-Merieux To Retain 100% Stake

Bio-Merieux, which is setting up a wholly owned subsidiary in the country, will not have to disinvest 49 per cent of the equity in five years as the Foreign Investment Promotion Board (FIPB) has agreed to delete the disinvestment clause stipulated in the approval earlier granted by it.

The company's 100 per cent subsidiary is designed to undertake production of reagents, speciality chemicals for testing and quality control for food industries, and invitro diagnostic for foreign companies. FIPB had earlier granted foreign collaboration approval to Bio-Merieux to set up a wholly owned subsidiary with the total equity of Rs 12 lakh. The board had, however, put the rider that the company would have to disinvest 49 per cent of the equity within five years. The rider was put in view of the comments of the departments of biotechnology and electronics. The company had moved the board again with a request to reconsider the disinvestment clause on the ground that it would bring to India state-of-the-art products based on extensive research and development undertaken in France. These products are covered by several patents. Moreover, the company said its policy was to expand globally through 100 per cent subsidiaries. This, said the company, was all the more necessary for India since it planned to

 

conduct research and development in the country.

Bio-Merieux had also requested that its Indian subsidiary be allowed to hold shares in other companies.

The company's request for reconsideration of the disinvestment clause was supported by the department of biotechnology while the department of chemicals and petrochemicals offered no comment.