Nirma, the unlisted company known for its soaps and detergent powders, is acquiring 75 per cent in Glenmark Life Sciences (GLS) for Rs 5,651.5 crore, implying an equity valuation of Rs 7,535.4 crore.
GLS is a developer and manufacturer of select active pharmaceutical ingredients (APIs) in chronic therapeutic areas.
Parent Glenmark Pharmaceuticals Ltd (GPL) announced on Thursday that it has entered into a definitive agreement with Nirma.
Nirma is offering Rs 615 per GLS share, a discount of nearly 1.92 per cent to the closing price of the GLS stock on the BSE on Friday.
Following the transaction, Glenmark Pharmaceuticals will own 7.84 per cent in GLS.
In line with Sebi rules, Nirma will make a mandatory open offer to all the public shareholders of GLS.
Glenmark Pharma added that as part of the transaction, the parties have agreed to certain non-compete and non-solicit arrangements for a specified period. Details of this agreement were not disclosed.
GPL added that the deal is subject to closing adjustments and customary conditions precedent, including receipt of regulatory and shareholder approval. For Nirma, the deal will mean its big entry into the pharmaceuticals sector.
Its businesses currently include consumer and industrial products. The company’s industrial products comprise linear alkyl benzene (LAB), alfa olefin sulfonate (AOS), sulfuric acid, glycerin, soda ash, pure salt and vacuum evaporated iodized salt according to its website.
“We are pleased to announce this strategic transaction with Nirma, which marks a significant milestone in shaping an independent growth trajectory for GLS. This deal aligns with our strategic intent of moving up the value chain to become an innovative/brand-led organisation, with continuous focus on our core therapeutic areas of dermatology, respiratory and oncology,” Glenn Saldanha, chairman and MD, GPL said.
“It also presents an opportunity for us to strengthen shareholder value through deleveraging and enhancing our overall return profile.”
GPL added the deal will allow it to give more attention to its branded business, globally, and complex generics.