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Home - Market - Article

Company Watch

Solvay India to merge with Abbott India

Our News Bureau, Mumbai

On November 24, 2010, Solvay Pharma India Limited ("Solvay India") announced that its Board of Directors had agreed to a scheme of amalgamation, under Sections 391 to 394 of the Companies Act, 1956, with Abbott India Limited ("Abbott India").

Under the scheme, Solvay India will be amalgamated into Abbott India, with shareholders of Solvay India receiving 3 shares of Abbott India for every 2 shares currently held in Solvay India, as a consideration for this all-stock transaction. Both companies have Abbott Laboratories, US (“Abbott”) as their ultimate majority shareholder and are independently listed on the stock exchanges in India.

The transaction is expected to be completed early next year and is subject to court approval of the scheme, closing conditions and approval from shareholders and creditors.

The amalgamation is a logical next step in the consummation of the global acquisition of Solvay’s pharmaceutical business by Abbott in 2009, which resulted in Abbott acquiring a majority ownership in Solvay India.

Abbott seeks to consolidate its position in India, which is one of the fastest growing healthcare markets in the world and the second largest generics market amongst the emerging economies. The merged entity will have a combined share of approximately three percent of the Indian market and approximately 11 percent market share amongst the multinational pharmaceutical companies in India, based on 2010 domestic sales

Abbott will also have a diversified portfolio of over 60 products including Duphaston, Udiliv, Vertin, Duphalac, Digene, Brufen, Synthroid, Cremaffin, Eptoin and Surbex; of which 9 brands feature in top 200 brands in the industry, with a well-diversified presence across fast-growing therapeutic areas spanning neurology, gastroenterology, urology, women’s health and paediatrics. The merger will mean greater and effective executive control and the ability to channelise synergy of operations and use of infrastructure facilities to unlock economies of scale.

With the proposed merger and together with the recently acquired branded generics business from Piramal Healthcare (which will continue to be housed in a separate 100 percent owned Indian subsidiary of Abbott Laboratories), Abbott emerges as the clear market leader in the Indian pharmaceuticals industry with over seven percent market share on a combined basis. UBS Investment Bank acted as sole financial advisor to Solvay India on the transaction and provided a fairness opinion to the Board of Directors on the transaction.


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