Wockhardt India which has been struggling for many years due to FDA-related manufacturing issues has decided to improve its cash flow by selling a plant and portfolio of 62 products to Dr. Reddy’s Laboratories to raise nearly $260 million (Rs.1850 crores).
Crux of the Matter
The sale is a part of Wockhardt’s strategic plan to shift from acute therapeutic areas to more chronic business. The deal includes offloading of selected Wockhardt’s branded operations in India, Nepal, Bhutan, Sri Lanka, and the Maldives. Wockhardt will be selling the plant in Baddi, Himachal Pradesh along with the transfer of all of the employees and operations to Dr. Reddy’s Laboratories.
This sale process is expected to be completed by the month of May. The sales of the transferred business were about Rs. 377 crore for 9 months up to December 31. The company has been facing losses for several years and has been under a debt of Rs.2560 crores as of September 2019 this deal will ‘strengthen the balance sheet’.
Wockhardt Chairman and founder Habil Khorakiwala said, “The company will still maintain a significant share in its Indian business, as well as operations in the U.S. and U.K. The divestment will ensure adequate liquidity to bring in robust growth in the chronic domestic branded business.”
Managing Director of Dr. Reddy’s, GV Prasad said, “the acquisition would help the company in considerably scaling up its domestic business and it shall enhance Dr. Reddy’s presence in the high growth therapy areas with market-leading brands.”
Curiopedia
Wockhardt Ltd. is a global pharmaceutical and biotechnology company headquartered in Mumbai. It produces formulations, biopharmaceuticals, nutrition products, vaccines and active pharmaceutical ingredients (APIs). The company employs over 8,600 people globally. It has market presence in emerging markets such as Russia, Brazil, Mexico, Vietnam, Philippines, Nigeria, Kenya, Ghana, Tanzania, Uganda, Nepal, Myanmar, Sri Lanka, Mauritius, Lebanon, and Kuwait. The Company has a market capitalization of over Rs.211 billion (US$3.0 billion) and an annual turnover of Rs.36 billion (US$500 million). More Info
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