Piramal Healthcare on Wednesday said it has completed the sale of its domestic formulations business to US-based Abbott Healthcare and has received R10,271 crore as initial consideration for the same.
"The transaction has today been closed and completed. Piramal Healthcare has received the initial consideration amount of R10,271 crore after adjustment," Piramal Healthcare said in a filing to the NSE.
Piramal had entered into a definitive agreement with Abbott in May this year for sale of its domestic formulations business, including its branded formulations business and its manufacturing facility at Baddi, for $3.7 billion (R18,000 crore).
According to the agreement, Abbott had agreed to pay $2.1 billion upfront and the remaining amount in four annual installments of $400 million.
"We are happy to see our domestic formulations business, that we nurtured for 22 years, now become a part of a value-driven company which assumes a leadership position in India," Piramal Group Chairman Ajay Piramal said.
Abbott, which has been propelled into market leadership in the Indian pharmaceutical market on the back of the acquisition, expects its pharmaceutical sales in India to exceed $2.5 billion by 2020.
"The acquisition...strengthens Abbott’s growing presence in emerging markets," Abbott Chairman and Chief Executive Officer Miles D White said.
The newly acquired business will operate as a separate unit, reporting to Abbott’s newly-created Established Products Division, which was formed to focus on branded generics.
As part of the agreement with Abbott, Piramal will not engage in the generic pharmaceutical business in the country for the next eight years.
The completion of the deal would also lead to the transfer of more than 5,000 employees of the domestic formulations business to Abbott.