Dr. Reddy’s Laboratories Completes the Acquisition of Select Business Divisions of Wockhardt
June 10 2020 - 5:49AM
Business Wire
Dr. Reddy's Laboratories Ltd. ("Dr. Reddy's") (BSE: 500124, NSE:
DRREDDY, NYSE: RDY) announces that it has completed the acquisition
of select divisions of Wockhardt Limited’s (“Wockhardt”) branded
generics business in India and a few other international
territories of Nepal, Sri Lanka, Bhutan and Maldives.
The business comprises of a portfolio of 62 brands in multiple
therapy areas such as Respiratory, Neurology, VMS, Dermatology,
Gastroenterology, Pain and Vaccines, which would transfer to Dr.
Reddy’s along with related sales and marketing teams; and the
manufacturing plant located in Baddi, Himachal Pradesh with all
plant employees (together the ‘Business Undertaking’).
On February 12, 2020, Dr. Reddy’s signed a Business Transfer
Agreement (‘BTA’) with Wockhardt, to acquire the above-referred
business undertaking for an upfront consideration of Rs.1,850
Crores.
In view of the COVID-19 pandemic and the consequent government
restrictions, there has been a reduction in the revenue from the
sales of the products forming part of the Business Undertaking
during March & April, 2020. Subsequently, through an amendment
to the BTA, Dr. Reddy’s and Wockhardt have agreed that the deal
consideration shall now be upto Rs. 1,850 Crores, to be paid as per
the following terms:
- an amountof Rs. 1,483 Crores paid on the date of closing
- an amount of Rs. 67 Crores to be deposited in an escrow account
which shall be released subject to adjustments for, inter alia, net
working capital, employee liabilities and certain other contractual
and statutory liabilities
- an amount of Rs. 300 Crores (‘Holdback Amount’) which shall be
released as follows:
- If the revenue from sales of the products forming part of the
Business Undertaking during the 12 months post-closing exceeds Rs.
480 Crores, Dr. Reddy’s will be required to pay to Wockhardt, an
amount equal to 2 (two) times the amount by which the revenue
exceeds Rs. 480 Crores, subject to the maximum of the Holdback
Amount.
G V Prasad, Co-Chairman and Managing Director of Dr. Reddy’s
said, “This deal is in line with our strategic focus on India and
has paved a path for accelerated growth and leadership in the
domestic market. We believe that the acquired portfolio offers a
good growth potential for us. We welcome the employees joining us
from Wockhardt to the family of Dr. Reddy’s.”
About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE:
500124, NSE: DRREDDY, NYSE: RDY) is an integrated pharmaceutical
company, committed to providing affordable and innovative medicines
for healthier lives. Through its three businesses - Pharmaceutical
Services & Active Ingredients, Global Generics and Proprietary
Products – Dr. Reddy’s offers a portfolio of products and services
including APIs, custom pharmaceutical services, generics,
biosimilars and differentiated formulations. Our major therapeutic
areas of focus are gastrointestinal, cardiovascular, diabetology,
oncology, pain management and dermatology. Dr. Reddy’s operates in
markets across the globe. Our major markets include – USA, India,
Russia & CIS countries, and Europe. For more information, log
on to: www.drreddys.com
Disclaimer: This press release may include statements of future
expectations and other forward-looking statements that are based on
the management’s current views and assumptions and involve known or
unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or
implied in such statements. In addition to statements which are
forward-looking by reason of context, the words "may", "will",
"should", "expects", "plans", "intends", "anticipates", "believes",
"estimates", "predicts", "potential", or "continue" and similar
expressions identify forward-looking statements. Actual results,
performance or events may differ materially from those in such
statements due to without limitation, (i) general economic
conditions such as performance of financial markets, credit
defaults , currency exchange rates, interest rates, persistency
levels and frequency / severity of insured loss events, (ii)
mortality and morbidity levels and trends, (iii) changing levels of
competition and general competitive factors, (iv) changes in laws
and regulations and in the policies of central banks and/or
governments, (v) the impact of acquisitions or reorganization,
including related integration issues, and (vi) the susceptibility of our industry
and the markets addressed by our, and our customers’, products and
services to economic downturns as a result of natural disasters,
epidemics, pandemics or other widespread illness, including
coronavirus (or COVID-19), and (vii) other risks and uncertainties
identified in our public filings with the Securities and Exchange
Commission, including those listed under the "Risk Factors" and
"Forward-Looking Statements" sections of our Annual Report on Form
20-F for the year ended March 31, 2019. The company assumes no
obligation to update any information contained herein.”
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INVESTOR RELATIONS AMIT AGARWAL amita@drreddys.com (PH:
+91-40-49002135) MEDIA RELATIONS APARNA TEKURI
aparnatekuri@drreddys.com (PH: +91-40- 49002446)
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