PM overrules DIPP, HealthMin to clear Mylan's Strides deal

Mylan's USD 1.6 billion acquisition of Agila Specialities today got the PM's nod, after he met commerce minister Anand Sharma and finance minister P Chidambaram. The Foreign Investment Promotion Board (FIPB) had kept its approval on the deal in abeyance till there was clarity on brownfield FDI norms. CNBC-TV18's Rituparna Bhuyan reports.

Strides Arcolab has entered into a definitive agreement for the sale of its specialities subsidiary to Nasdaq listed Mylan Inc for a total consideration of Rs 9,950 crore.
The Department of Industrial Policy and Promotion (DIPP) had told the Prime Minister's office (PMO) that brownfield foreign direct investment (FDI) in pharma merely leads to substitution of domestic capital. There is no research and development (R&D) that takes place and critical areas like vaccines or oncology are getting taken over by multi-national companies (MNCs). Also Read: FIPB clears 12 FDI proposals worth Rs 343 cr
"We have a policy in place. If there are issues raised those would be discussed and if need be there to put in additional safeguards or some conditions. But as per the proposals, which have been scrutinized and approved, they will go through. They will come before the Cabinet Committee on Economic Affairs (CCEA) and they will be approved," Anand Sharma told CNBC-TV18.
Sources say that the DIPP is going to come up with a Cabinet note on brownfield FDI where it will propose stringent conditions for verticals like vaccines, injectibles as well as oncological injectibles and active pharmaceutical ingredients (APIs).