New Delhi, Sept. 3: The cabinet committee on economic affairs (CCEA) today approved with some riders the $1.6-billion proposal of US-based pharmaceutical firm Mylan to acquire Strides Arcolab’s Agila Specialties unit.
The transaction is the third largest buyout in the sector.
Mylan had 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 raised concerns over buyouts of existing facilities by multinationals.
“The CCEA has given its nod to Mylan’s Rs 5,168-crore proposal to acquire Agila,” information and broadcasting minister Manish Tiwari said.
The deal is subject to certain conditions. Mylan must spend in R&D for five years the amount Agila was spending at the time the foreign investment was made. Similarly, Mylan must commit itself to produce a specific amount of essential medicines
The Foreign Investment Promotion Board had given its approval. However, the deal had to be cleared by the CCEA as the FIPB can clear proposals up to Rs 1,200 crore.