The long-pending merger of Dr Reddy's Laboratories and American Remedies (ARL) has been completed with retrospective effect from April 1, 1999.
The Madras and Andhra Pradesh high courts have approved the scheme of merger.
Dr Reddy's had acquired 87 per cent stake in ARL in 1999 under a scheme of merger approved by the boards of the two companies on March 6, 1999.
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The boards then set the share swap ratio at 1:12, i.e., one share of Dr Reddy's for twelve shares of ARL. The merger was approved by shareholders of Dr Reddy's on May 31, 1999, and by ARL's shareholders on July 15, 2000.
Since 87 per cent of ARL equity is held by Dr Reddy's, the equity of the latter will just go up by about Rs 5 lakh, post-merger. The record date for conversion of ARL shares into Dr Reddy's is August 28, 2001.
Post-merger, the marketing and sales teams of both the companies have been integrated to form four operational groups -- Xenura, Recura, Acqura and Natura.
Each group would focus on specific therapeutic areas. The company hopes that the structure would help bring a sharper focus on branding and help Dr Reddy's attain leadership in select therapeutic areas.
Analysts say the brand portfolios of Dr Reddy's and ARL complement one another. Seven brands of Dr Reddy's -- Omez, Nise, Stamlo, Ciprolet, Enam, StamoBeta and Reclide -- figure among the top 300 brands in the country as per ORG (2001).
The main brands of ARL are Mucolite, Antoxid, BioE, Becozine, GLA 120, Gris OD and Optisulin.
The merger will enhance the retail penetration of the company by strengthening its trade network to 2,000 stockists, a Dr Reddy's statement said.
For the year ended March 2001, ARL had posted a net profit of Rs 11 crore on a turnover of Rs 85 crore.