| Hyderabad-based Matrix Laboratories Ltd and Bangalore-based Strides Arcolab Ltd have decided to merge into a single company called Matrix Strides Ltd. |
| The new company will be India's seventh largest drug maker. Its combined turnover will be over Rs 1,000 crore with a net profit in excess of Rs 170 crore. |
| Going by current stock prices, the merged entity will be valued at about $850 million. The Strides scrip rose 13 per cent to close at an all-time high of Rs 284.35 on the Bombay Stock Exchange, while Matrix rose 1.4 per cent to close at Rs 186.90. |
| The boards of both the companies have approved the deal, which is subject to a valuation exercise and due diligence. The two boards expect to meet within eight weeks to finalise the terms of the merger. |
| Matrix Strides will have 20 manufacturing plants, of which six are into active pharmaceutical ingredients (APIs), five into intermediates and eight into finished dosages. |
| "Of the six API plants, four are FDA approved and the remaining two are likely to get approval by the middle of next year," N Prasad, chairman and chief executive officer of Matrix, said. |
| Talking about operational synergies between the two companies, Prasad said: "Strides is more into finished dosages, while we are engaged in the manufacture of APIs and solid oral dosage forms. |
| "Besides, Strides is into a niche market segment of soft gels and steriles." |
| The new company would be able to cut production costs and strengthen its overseas presence, as well as its position as a supplier of anti-retroviral Aids drugs, Prasad added. |
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