Pharmaceutical major Wockhardt Ltd has agreed to sell its nutrition business to French food multinational Danone for about $356 million (Rs 1,576 crore), more than double the amount at which it had signed a similar deal with US pharmaceutical giant Abbott a year ago.
The Abbott deal was called off after Wockhardt’s lenders opposed the sale of its nutrition business.
Under the current agreement, Danone will acquire Wockhardt's nutrition business and brands such as Farex, Dexolac, Nusobee and Protinex as well as related industrial operations from Carol Info Service, located in Punjab, to enter the baby nutrition and medical nutrition markets in India.
Danone has global leadership in fresh dairy products and is the second largest player in bottled water and baby nutrition.
| HOW IT HAPPENED |
| APRIL 2009 Wockhardt announces intent to restructure debt, recast certain businesses and units. Promoter Habil Khorakiwala steps down as MD, son Murthaza replaces him |
| JUNE 2009 Announces the sale of German subsidiary Esparma to Mova GmbH for Rs 120 cr and veterinary business to French company Vetoquinol for Rs 170 cr |
| JULY 2009 Bankers approve Wockhardt’s debt restructuring package; company signs an agreement to sell nutrition business to Abbott for Rs 620 cr |
| AUGUST 2009 Khorakiwala family sells 10 hospitals to Fortis for Rs 909 cr |
| OCTOBER 2009 DBS Bank, BNY Corporate Trustee Services file winding up petition in Bombay High Court |
| JANUARY 2010 Bombay High Court declines to grant an injunction to stall sale of nutrition business. Foreign lenders, represented by QVT, suggest that Wockhardt issue fresh FCCBs, which can be converted in five years |
| FEBRUARY 2010 Foreign lenders agree to sale of nutrition business, subject to conditions |
| APRIL 2010 Wockhardt-Abbott deal on sale of nutrition business called off |
| AUGUST 2011 Wockhardt, Danone agree on Rs 1,576-crore deal |
The market was abuzz with Wockhart’s fresh negotiations with global players for the sale of its nutrition business for several months now. Wockhardt’s shares touched a 52-week high on the Bombay Stock Exchange on Tuesday on sale talks and closed at Rs 459.60 a share.
The renewal of negotiations became possible after the Bombay High Court refused to give an injunction to stall the sale of Wockhardt’s nutrition business as demanded by a section of the company's investors holding 40 per cent of its foreign currency convertible bonds last year. Wockhardt is yet to resolve its issues with its lenders, which include a clutch of investment firms and the company’s local competitor Sun Pharmaceuticals.
According to sources close to Wockhardt’s investors, the company may have to seek the Bombay High Court’s approval for the successful closure of on Tuesday’s deal.
