Sun Pharmaceutical Industries, India’s top drug maker by sales, has agreed to sell two divisions marketing central nervous system drugs to Strides Arcolab for Rs 165 crore.
Sun Pharma, which last year bought domestic peer Ranbaxy Laboratories, in July said it might sell low-margin businesses that did not hold long-term value.
Under the latest deal, Strides Arcolab will take over Ranbaxy’s Solus and Solus Care divisions, Sun Pharma said in a statement.
Both these divisions operate in the central nervous system (CNS) segment in India and the agreement involves transfer of two of their marketing arms along with the employees to Strides.
“We have identified two-three businesses… we are evaluating which of these businesses we would like to divest,” managing director Dilip Shanghvi had said in July.
In a statement, Sun Pharma said according to an IMS July report, all the products of these two divisions accounted for around Rs 92 crore in sales and that during the divestment process, Sun Pharma was careful that the interests of its employees working in the two divisions were not compromised.
Abhay Gandhi, CEO of India Business, Sun Pharma said, “The agreement with Strides is part of our strategy to firmly consolidate our CNS business in India. Post successful completion of Ranbaxy’s merger we had an opportunity to assess the entire portfolio of our India business.
“We have evaluated each and every therapy segment that we are present in and how these businesses can grow going forward.”
“Based on this evaluation, we firmly believe that the potential of Solus and Solus Care divisions can be greatly enhanced with the focus that Strides will put in growing them. The divestment will help these divisions, its customers and the team,” he said.
According to Subroto Banerjee, president (brands, India) of Strides, the acquisition is of strategic significance to the growth of its branded business in India.
“The rich product portfolio and capable teams of these two divisions will help us establish a strong footing in the fast growing CNS market of India. The product portfolio of Strides and these divisions will strategically complement each other very well.”
Sun Pharma added that the transaction is subject to approval from the Competition Commission of India and other customary closing conditions.
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