Strides Arcolab and Shasun merge to form Rs 2500-cr phama giant

The boards of Bangalore-based Strides Arcolab Limited and Chennai-based Shasun Pharmaceuticals Limited have agreed to merge the two companies, taking it into top 15 list of Indian pharma companies with a turnover in excess of Rs 2,500 crores.
 
The combined entity is expected to create a vertically integrated pharma company of scale with strong presence in regulated market finished dosage formulations (FDF), emerging markets branded generics, institutional business, active pharmaceutical ingredients (APIs), contract research and manufacturing services (CRAMS) and a nascent biotech business.
 
Arun Kumar, Founder and Group CEO of Strides Arcolab, stated, “Since the divestment of our injectables business, which resulted in significant value creation for our shareholders, Strides has refocused on its oral finished formulation business. Today’s proposed combination with Shasun accelerates our strategy and growth prospects by creating a larger scale, fully integrated, leading Indian pharma company with multiple growth drivers and synergies that will allow for enhanced profitability and more efficient use of our combined infrastructure and enhanced value creation opportunities for the combined shareholder group.”
 
Pursuant to the scheme of arrangement, each equity shareholder of Shasun will be entitled to receive 5 equity shares of Strides for every 16 equity shares held by it in Shasun. Based on the Exchange Ratio, Shasun shareholders will own 26% of the combined entity.
 
Abhaya Kumar, CEO and Managing Director of Shasun, stated, “Strides and Shasun bring complementary strengths and shared values of developing products and market opportunities across geographies and the combination accelerates both scale and scope. We are confident that the vertically integrated new combination will deliver further additional value in the near term for all stakeholders above and beyond the strong gains we have achieved to date on our own.”
 
The combination will significantly enhances finished dosages portfolio in niche and complex domains with a pipeline of over 100 products and accelerates product filings with a combined R&D strength of over 400 personnel.
 
The merger deal will lead to significant de-risking of operations with the combined entity having 12 manufacturing facilities including three USFDA approved finished dosage manufacturing facilities, two USFDA approved API manufacturing facilities, one USFDA approved CRAMS facility and six manufacturing facilities catering to the emerging markets.
 
The merged entity will leverage Shasun’s state-of-the-art API manufacturing capacities and shift focus towards niche APIs aligned with finished dosages portfolio and pipeline.