Nirma to buy Glenmark Life Sciences for 5,651 cr
MUMBAI : Nirma Ltd has agreed to buy 75% of Glenmark Life Sciences Ltd for ₹5,651.5 crore in a deal that values the latter at ₹7,535.4 crore. Mint reported first on 15 August that the cement-to-detergent maker was the sole bidder for the stake put on the block by parent Glenmark Pharmaceuticals Ltd, which is selling shares to Nirma at ₹615 apiece. Glenmark Pharma will continue to own 7.84% of Glenmark Life Sciences.
Nirma will make a mandatory open offer to all public shareholders of Glenmark Life Sciences for an additional 17.15% stake at ₹631 a share. The life sciences company listed on the bourses in August 2021 at ₹720 a share. The sale will be subject to various conditions, including receipt of regulatory and shareholder approvals.
“Glenmark Pharma has decided to move up the value chain. Over the years, the generic environment has changed, and it has become very competitive. We are focusing more on complex generics and branded drugs.
Both the companies had divergent paths, and hence the management decided to divest stake and deleverage the balance sheet," said Glenn Saldanha, chairman and managing director of Glenmark Pharmaceuticals Ltd. Glenmark Pharma will use the money from the sale to repay debt. “We currently have around ₹3,000 crore of net debt.
Net of tax, the proceeds will be around ₹5,000 crore. Glenmark will be a net cash-positive company in FY24," Saldanha told reporters after the announcement. Saldanha said the two Glenmark companies have few synergies now, and less than 15% of Glenmark Pharma’s APIs are sourced from Glenmark Life Sciences.
Around 65% of Glenmark Pharma’s business now comes from branded generics. The US generics contribute around 25%, and a small percentage comes from Europe. Glenmark
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