Pharmaceutical company Sanofi India Ltd (SIL) has decided to sell a manufacturing unit in Gujarat’s Ankleshwar to Advent International-backed Zentiva Pvt. Ltd (ZPL) for Rs 261.7 crore (about $36.53 million at current exchange rates) in a slump sale.
Mumbai-based SIL said the transaction is subject to working capital adjustments, the pharma major said in a stock-exchange filing.
The sale of the unit was in line with its broader strategy, including to address its unutilised manufacturing capacity and the focus on producing Sanofi-branded products, it added.
The transaction is expected to be completed by the end of March next year.
The move is a part of a global transaction agreement between the larger Sanofi Group and Advent International, in which the latter acquired Zentiva, which was part of Sanofi’s generics business. ZPL continued to source products from Sanofi as part of a five-year supply agreement.
“The board has also taken into consideration the valuation report issued by Deloitte Touche Tohmatsu India LLP and a fairness opinion on such valuation issued by ICICI Securities Limited,” according to the filing.
The sale will also improve asset efficiency ratios, it said, adding that it will mitigate any potential revenue losses through focus on its core activities and brands.
The Ankleshwar unit is involved in the manufacturing of active pharmaceutical ingredients (API) and finished products for sales and distribution around the world.
The company will move the products, which are being manufactured at Ankleshwar, to another site later this year. While other products which are manufactured by Zentiva at other sites, will be transferred to Ankleshwar during the same period.
SIL, a part of the larger Sanofi Group, has a presence in over 100 countries and provides its healthcare solutions to over 170 nations, according to its website. It employs more than one lakh people, and focusses on areas such as pharmaceutical products, vaccines, consumer healthcare products and clinical trials as well.