Biosimilars manufacturing arm of Biocon Ltd, Biocon Biologics, on Tuesday announced completion of acquisition of Viatris' global biosimilars business for $3 billion.
As per the statement issued by the parent pharmaceuticals company, Biocon Ltd, the multi-billion-dollar acquisition was completed in part equity and part cash. Biocon Biologics paid an upfront cash of $2 billion and issued compulsorily convertible preference shares (CCPS) worth $1 billion.
The acquisition deal has received all its approvals from critical global regulators like the US Federal Trade Commission, the Competition Commission of India and the Reserve Bank of India, and its investors, respectively.
The acquisition was announced after the closure of stock markets on Tuesday. Shares of Biocon opened little changed on Wednesday to trade with a mid cut of 0.2% at Rs 281.50 apiece on BSE.
Biocon is a globally recognized name in the pharmaceutical manufacturing industry. It manufactures medicines and other pharma products utilised in the treatment of chronic conditions like diabetes, cancer, and autoimmune.
The Viatris acquisition is seen as an expansion of Biocon Biologics and will help the company in enhancing its commercial capabilities supporting infrastructure. Currently, the company produces 20 biosimilar assets including insulins and others associated with monoclonal antibodies spanning therapy areas such as diabetes, oncology, immunology and ophthalmology, the statement added.
"The completion of the acquisition of Viatris' global biosimilars business is a historic inflexion point in Biocon Biologics' journey of becoming a world-leading, fully integrated biosimilars enterprise, committed to serving patients' needs for affordable access to essential biomedicines. It will fast-track our direct entry into several advanced and emerging markets," said Kiran Mazumdar Shaw, the executive chairperson of Biocon Biologics.
Viatris will continue to work with the teams and on its existing projects for two years to avoid disruptions in the company operations. Biocon Biologics has issued Compulsorily Convertible Preference Shares (CCPS) in the company worth $1 billion, equivalent to an equity stake of at least 12.9 per cent on a fully diluted basis. It received an upfront cash payment of $ 2 billion to Viatris.
With the completion of this transaction, Biocon Limited's will become the owner of 68% stakes in Biocon Biologics. Biocon Biologics streamlined the funds from its $1.2 billion Sustainability Linked Loan(SLL) into the payment. The remaining payment was made through an equity infusion of $ 650 million by Biocon Limited and $150 million by Serum Institute Life Sciences (SILS).
Biocon Limited funding consists of $230 million from existing reserves and the balance of $420 million through mezzanine financing. The company is attempting to secure other investments to retire the mezzanine financing, post-deal closure.