Biocon Ltd.’s unit has signed a pact with its partner Viatris Inc. to acquire its biosimilars business for up to $3.335 billion (about Rs 26,079 crore) in stock and cash.
Viatris will receive a cash consideration of $2 billion on closing of the deal and up to $335 million as additional payments expected to be paid in 2024, according to an exchange filing. Upon closing of the transaction, Biocon Biologics Ltd. will issue $1 billion of compulsorily convertible preference shares to Viatris, equivalent to an equity stake of at least 12.9% in the company, on a fully diluted basis.
The cash payment of $2 billion will be funded by $800 million raised through equity infusion in Biocon Biologics and the rest to be funded by debt, additional equity or a combination thereof, the filing said. “Biocon Biologics has received expressions of interest from financial institutions for debt financing and equity commitments from existing shareholders.”
Kiran Mazumdar-Shaw will continue as executive chairperson of Biocon Biologics. Viatris will designate Rajiv Malik, its president, to serve on Biocon Biologics’ board.
Biocon Biologics currently has a portfolio of 20 biosimilars. The acquisition of Viatris’ biosimilars assets, according to the filing, “strengthens its position in providing affordable access to patients through its portfolio in diabetes, oncology, immunology and other non-communicable diseases”.
Mazumdar-Shaw, in the filing said, this “strategic combination brings together the complementary capabilities and strengths of both partners and prepares us for the next decade of value creation for all our stakeholders”.