New Delhi, Aug. 27: US-based Mylan’s $1.8-billion proposal to acquire Strides Arcolab’s Agila Specialties unit has been cleared by the Foreign Investment Promotion Board (FIPB).
“The Mylan proposal was cleared,” economic affairs secretary Arvind Mayaram said after an FIPB meeting here today.
The cabinet committee on economic affairs (CCEA) will take a final call on the Rs 5,168-crore foreign investment proposal as the FIPB is authorised to approve proposals of up to Rs 1,200 crore.
Mayaram, who heads the FIPB, said all pending investment proposals in existing pharmaceutical projects had been cleared.
A proposal of Symbiotec Pharmalab to transfer shares worth Rs 330 crore to a foreign company that had been kept on hold has been cleared. A proposal by Lotus Surgical Specialties also got the green signal.
The Mylan-Strides transaction is the third largest acquisition deal in the pharmaceutical sector.
The US-based firm announced the deal in February but the government’s approval had been hanging fire for almost six months after the department of industrial policy and promotion (DIPP) raised concerns over the buyout of existing facilities by multinationals.
The DIPP feared that the acquisition would impact the supply and prices of some critical cancer medicines manufactured by Agila Specialties.
Prime Minister Manmohan Singh in a recent meeting on FDI with all the concerned ministries had discussed these concerns and asked the FIPB to expedite the clearance of pending proposals after evaluating all safeguards.
In 2002, the government had allowed foreign drug companies to own 100 per cent in Indian ventures.
However, the recent spate of acquisition of local drug makers by foreign firms has sparked concerns.