Drug major Cipla today said its board has approved the transfer of its consumer healthcare business to a wholly-owned subsidiary--Cipla Health--for a total consideration of Rs 16 crore.
The company's board has approved the transfer of the consumer healthcare business to Cipla Health Ltd on a going concern basis by way of a slump sale for a lumpsum consideration of Rs 16 crore, Cipla said in a regulatory filing.
Cipla Health was incorporated on August 27, 2015 to focus on the consumer healthcare space.
"Pursuant to the board approval, the business transfer agreement is in the process of being finalised," the company said.
The transaction is expected to be completed within the fourth quarter of the financial year 2015-2016, subject to the execution of the agreement and completion of certain conditions precedent, it added.
The transfer of the consumer healthcare business to Cipla Health will enable the Mumbai-based firm to participate in the attractive and growing over-the-counter market.
"This business requires a specialised FMCG kind of focus, and a separate subsidiary would enable the company to attract the right talent and provide the focus and attention required for this business," the company said.
The Indian consumer health care is a USD 4 billion market and is growing at a CAGR of 15 per cent. It is expected to be a USD 10 billion market by 2020.
Shares of Cipla today ended at Rs 635.20 apiece on the BSE, up 1.89 per cent from previous close.
