Novartis To Transfer Stake In Indian Arm To Ciba Speciality

In a group restructuring, Novartis AG is transferring its stake in Ciba India Pvt Ltd (CIPL), a wholly-owned subsidiary, to Ciba Speciality Chemicals AG, Switzerland.

CIPL was set by Ciba-Geigy to be the primary vehicle for its joint ventures in India. CIPL has already tied up with Atulya Mafatlal-controlled Indian Dye-stuff Industries (IDI) and Tamil Nadu Petroproducts (TPL).

In a related development, CIPL is transferring its 51 per cent stake in its pigments joint venture with IDI to Ciba Speciality Chemicals (India) Ltd.

Company sources said the transfer price for CIPL's shareholding in Pigments Specialities India Pvt Ltd, the joint venture company, will soon be decided.

 

Ciba Speciality Chemicals (India) Ltd is being formed by the de-merger of Hindustan Ciba-Geigy's speciality chemicals business.

However, CIPL's 76 per cent stake in another venture with TPL, Petro Araldite Pvt Ltd, will remain with it.

The marketing function is now likely to be transferred to Ciba Speciality (India) Ltd.

The swap will take place after CIPL's current global parent, Novartis AG, hands control over CIPL to Ciba Speciality Chemicals AG of Switzerland.

Novartis AG was formed recently by the merger of two global drug giants, Ciba-Geigy and Sandoz.

When Ciba and Sandoz decided to merge globally, the Ciba management decided that speciality chemicals was to be divested into a separate company, Ciba Speciality Chemicals AG.

In India, the merger and de-merger are pending before the courts and if approved, it will bring into existence Ciba Speciality Chemicals (India) Ltd.

The transfer of CIPL's 51 per cent stake in Pigments Specialities is being considered a logical step as it fits in well with Ciba Speciality's main businesses, dyes, pigments and additives.

Industry sources say the step could be a prelude to the ultimate merger of Ciba India with Ciba Speciality Chemicals (India). According to company sources, although this is a possibility, there are no such immediate plans.

Without the merger, Ciba Speciality Chemicals AG will have two companies operating in India, Ciba Speciality Chemicals (India) Ltd and Ciba India Pvt Ltd (CIPL).

Meanwhile, the Mumbai High Court will hear on May 2 petitions seeking approval of the domestic merger of Hindustan Ciba-Geigy's life sciences business with Sandoz (India) Ltd and the de-merger of its speciality chemicals business.

After the de-merger of Hindustan Ciba-Geigy's speciality chemicals business to CSCIL is approved, Ciba Speciality Chemicals, Switzerland, will hold 40 per cent equity.

Ciba India will have a 11 per cent stake and the remaining 49 per cent will be held by the public.

Ciba India entered into a joint venture with IDI of the Mafatlal group to form Pigments Specialities. Hindustan Ciba-Geigy's pigments business was to be sold to this joint venture for a sum of Rs 5 crore.

Now, this will not be necessary as the pigments business is being transferred to Ciba Speciality Chemicals, which will also hold a 51 per cent stake in Pigments Specialities.