[ad_1]
Shares of Biocon slipped 8 per cent to Rs 363.45 on the BSE in Monday’s intra-day trade after Biocon Biologics (BBL), the subsidiary of the company, announced to acquire Viatris’ biosimilars assets for up to $3.335 billion in stock and cash.
Viatris will receive cash consideration of $2 billion on closing of the transaction and up to $335 million as additional payments expected to be paid in 2024. Additionally, upon closing of the transaction, BBL will issue $1 billion of compulsorily convertible preference shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9 per cent in the company, on a fully diluted basis.
The transaction is expected to close in second half of 2022 (H2-2022). The companies will also enter a transition services agreement, in which Viatris will provide certain transition services, including commercialization services for two years.
That apart, Viatris will also pay $50 million to BBL to fund certain capital expenditures. The cash payment of $2 billion will be funded by $800 million raised through equity infusion in BBL and the remainder by debt, additional equity or a combination of both.
“This transaction accelerates BBL’s direct commercialization strategy for its current and future biosimilars portfolio. Viatris to provide commercial and other transition services for an expected period of two years to ensure continued customer service and smooth transition to BBL. The deal will be value accretive to Biocon and BBL shareholders and is structured as part-cash, part-equity,” the company said in a press release.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link