Glenmark sells bulk drug business to Nirma for ₹5,651 cr

Mumbai-based pharmaceutical major Glenmark Pharmaceuticals Limited will divest 75% of its stake in its subsidiary, Glenmark Life Sciences Limited (GLS), to Nirma Limited. GLS is a leading developer and manufacturer of active pharmaceutical ingredients (API or key raw materials) that go into the production of medicines. Nirma is an FMCG major that manufactures products ranging from cosmetics to soaps to detergents.

"We are pleased to announce this strategic transaction with Nirma Limited, which marks a significant milestone in shaping an independent growth trajectory for GLS. This deal aligns with our strategic intent of moving up the value chain to become an innovative/brand-led organisation, with a continuous focus on our core therapeutic areas of dermatology, respiratory, and oncology. It also presents an opportunity for us to strengthen shareholder value through deleveraging and enhancing our overall return profile,” Glenn Saldanha, chairman, and managing director, Glenmark Pharmaceuticals Ltd, says.

The stake sale is valued at ₹5,651 crore (at a price of ₹615 per share), Glenmark says. The company will own 7.84% of GLS after the divestment. Pursuant to the transaction, Nirma will make a mandatory open offer to all public shareholders of GLS.

“Today’s announcement marks the next step in the journey of the company, one that will accelerate growth and help create more value for our stakeholders in the long term. We will continue to operate as an independent API company under the new ownership of Nirma Limited. I see this as an opportunity to further strengthen our position in the API industry and continue the growth trajectory,” Dr Yasir Rawjee, Managing Director and CEO, Glenmark Life Sciences Limited says.

Glenmark Pharmaceuticals 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.

Kotak Investment Banking acted as the exclusive financial advisor to Glenmark Pharma and GLS on this transaction. S&R Associates acted as legal advisor to Glenmark Pharma and Trilegal acted as legal advisor to GLS. Khaitan & Co advised Nirma Limited in its acquisition in Glenmark Life Sciences Limited from Glenmark Pharmaceuticals Limited.