Mumbai: Biocon has announced plans to fully merge Biocon Biologics Limited (BBL) into the parent company by making it a wholly owned subsidiary. To achieve this, Biocon will acquire the minority stakes
held by Mylan, Serum Institute Life Sciences, Tata Capital Growth Fund II and Activ Pine LLP through a mix of share swap and cash payment. This strategic move is aimed at simplifying the company structure and strengthening control over its biologics business.
How the Deal Will Be Executed
As part of the merger, Biocon will acquire 40,55,86,862 shares of Biocon Biologics Limited. This will allow Biocon to own 100 percent of its biologics arm. The company said the transaction has been approved by its board and will be carried out after receiving necessary regulatory and shareholder approvals.
Stock Likely to Be in Focus
Biocon shares are expected to be in focus on Monday, December 08, following the announcement. The stock ended last week 1% higher at Rs 392.05 per share. On a year-to-date basis, the stock has delivered 6.30% returns to investors. Market participants are closely watching how the stock reacts to this development.
Fundraising Plan Explained in Simple Terms
To fund the cash part of the deal, especially the payment to Mylan, Biocon plans to raise up to Rs 4,500 crore. The company may use different methods such as Qualified Institutional Placements (QIP), rights issue, preferential allotment or private placement. This money will mainly be used to buy out Mylan’s stake in BBL.
In the short term, Biocon will also issue commercial papers worth up to Rs 1,800 crore. This will help the company make the immediate cash payment before the larger fundraising process is completed.
About the Company
Biocon is a fully integrated, innovation-led biopharmaceutical company. It develops affordable biosimilars, generic formulations and complex active pharmaceutical ingredients (APIs). The company was co-founded by Kiran Mazumdar Shaw and is known for its focus on improving access to high-quality and cost-effective medicines.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should consult financial advisors before making any investment decisions related to stocks or corporate actions.
