Aurobindo Pharma jumps nearly 7% after cancelling 420-cr Cronus Pharma deal

Aurobindo Pharma announced on August 12 that it had entered into definitive agreements to subscribe to fresh equity shares in Hyderabad-based Cronus.
Aurobindo Pharma said at that time that the acquisition would provide it with a foothold in the $48 billion global animal health market. (File Photo)
Aurobindo Pharma said at that time that the acquisition would provide it with a foothold in the $48 billion global animal health market. (File Photo)
Updated on Aug 23, 2021 12:44 PM IST
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By | Written by Meenakshi Ray, New Delhi

Aurobindo Pharma shares climbed over 6 per cent on Monday after the company said it has cancelled its 450-crore deal to acquire a 51 per cent stake in Cronus Pharma Specialities India Pvt Ltd Analysts believe the deal led to concerns over Aurobindo’s capital allocation strategy.

"The board of directors in its meeting held today has approved the termination of the aforesaid agreements, and the parties have mutually agreed and terminated the said agreements,” Aurobindo Pharma said in In a regulatory filing on Friday without disclosing the reasons for the termination of the proposed deal.

Aurobindo Pharma announced on August 12 that it had entered into definitive agreements to subscribe to fresh equity shares in Hyderabad-based Cronus. The company said it entered into binding agreements with the generic veterinary pharmaceutical products firm for the acquisition of 51 per cent ownership by subscribing to 95,059,963 equity shares of 10 each at a premium of 34.18 per equity share aggregating to 420 crore.

Aurobindo Pharma said at that time that the acquisition would provide it with a foothold in the $48 billion global animal health market. Cronus has 67 products in its pipeline, of which 22 have been filed and six have been approved by the Centre for Veterinary Medicine of the US Food and Drug Administration (FDA).

Aurobindo Pharma’s stock has declined 18 per cent since it announced its lower-than-expected Q1 FY22 results, seven observations by the US FDA after the inspection of its Unit I plant and its acquisition of a 51 per cent stake in Cronus Pharma.

(With agency inputs)

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