Glenmark Pharma agrees to divest a 75% stake in its subsidiary; complete details inside

Glenmark Pharmaceuticals, a prominent global research-led pharmaceutical company with a presence across generic speciality and OTC business, has made a significant announcement regarding disinvestment in its subsidiary company.

As detailed in the official report, Glenmark Pharmaceuticals Limited has reached a definitive agreement with Nirma Limited to sell a 75% stake in its subsidiary, Glenmark Life Sciences Limited (GLS) at Rs 615 per share.

The total consideration for this transaction amounts to Rs 56,515 million implying an equity valuation of Rs 75,354 million, with potential adjustments upon closing. Following the divestment, Glenmark Pharma will retain a 7.84% ownership stake in its subsidiary GLS.

However, the completion of this transaction is contingent upon standard conditions precedent, including regulatory and shareholder approvals.

Kotak Investment Banking served as the exclusive financial advisor to both Glenmark Pharma and GLS for this transaction. S&R Associates provided legal advisory services to Glenmark Pharma, while Trilegal served as the legal advisor to GLS.

In connection with the transaction, Nirma Limited will be obligated to make a mandatory open offer to all public shareholders of GLS.

The open offer is for the acquisition of up to 2.12 crore fully paid-up equity shares with a face value of Rs 2 each of Glenmark Life Sciences Limited at a price of Rs. 631.20 per equity share. These shares represent 17.33% of the Voting Share Capital and are being offered to the public shareholders by Nirma Limited. This offer totals a consideration of Rs. 1,343.05 crore, to be paid in cash. DAM Capital Advisors Limited has been appointed as the manager for the open offer.

Following this news, the shares of Glenmark Pharma opened the day in red at Rs 815.95, which is 1.5% lower than its previous closing price of Rs 828 each on the BSE. Currently, they have fallen by 5.22% and are trading at Rs 784.80 per share.

On the other hand, shares of Glenmark Life Sciences Limited are trading flat compared to their previous day’s closing price of Rs 623.50 apiece on the BSE.

Glenmark Pharma is an integrated, research-led, global pharmaceutical company, having a presence across Branded, Generics, and OTC segments, with a focus on therapeutic areas of respiratory, dermatology, and oncology. The company has 10 world-class manufacturing facilities spread across 4 continents, and operations in over 80 countries.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.