The deal will enable Glenmark Pharma to concentrate on its line of branded drugs for the treatment of skin and respiratory conditions and help the pharmaceutical firm to make investments in product development for the expansion of its market presence in Latin America, some regions of Europe, and India
Glenmark to divest its life science subsidiary to Nirma. (Credit: Credit Commerce from Pixabay)
India-based Glenmark Pharmaceuticals has agreed to divest a 75% stake in its subsidiary, Glenmark Life Sciences (GLS), to detergent maker Nirma for INR56.5bn ($679.8m).
The stake in Glenmark Life Sciences was sold at INR615 per share and Glenmark Pharma will continue to own 7.84% in GLS after the divestment.
The deal is subject to typical closing requirements, such as receiving shareholder and regulatory approvals.
Under the deal, Nirma will make an obligatory open offer to all GLS public shareholders.
The transaction will enable Glenmark Pharma to concentrate on its line of branded drugs for the treatment of skin and respiratory conditions.
It will also help the pharmaceutical firm to make investments in product development for the expansion of its market presence in Latin America, some regions of Europe, and India.
The agreement would aid privately held India-based Nirma in expanding its market share in the healthcare industry. In April, the business purchased Stericon Pharma, a manufacturer of sterile contact lens solutions.
Additionally, Nirma extended an open invitation to GLS shareholders to purchase an additional 17.33% of the firm at INR631 per share. Following the transaction, Glenmark Pharma will own 7.84% of the life sciences company.
Glenmark Pharmaceuticals chairman and managing director Glenn Saldanha said: “We are pleased to announce this strategic transaction with Nirma Limited, 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.
“It also presents an opportunity for us to strengthen shareholder value through deleveraging and enhancing our overall return profile.”
In February last year, Glenmark in partnership with Canada-based SaNOtize, launched its nitric oxide nasal spray in India, under the brand name FabiSpray, to treat Covid-19 in adult patients.