Eris Lifesciences on Saturday said it has entered into a definitive agreement to buy India branded generics business of Strides Shasun for an aggregate cash consideration of Rs 500 crores.
As per the terms of the agreement, Eris will acquire the marketing and distribution rights for the said portfolio of products in India, along with the employees forming part of the business. Strides will retain the global rights to the products.
Talking about the rationale behind this move, Shashank Sinha, MD, Strides Shasun said sale of the branded generics business portfolio is not the reflection of our view of India market but just reprioritisation of the company's portfolio.
He also clarified that they did not have a plump position in India with regards to the branded generics business, it was only 5 percent of their India portfolio.
This is will also allow them to focus much more on markets where they have significant investments and inroads and would be remunerative from medium-term earnings perspective, said Sinha in an interview to CNBC-TV18.
It was a strategic move to divest non-core businesses. The spin-off of the generic business in African was also a move in that direction, said Sinha. The net proceeds from this deal would also be used to reduce debt. The company plans to reduce debt to the tune of Rs 400 crore. Post this deal, the EPS would also increase by Rs 6 per share, he added.
The focus of the company is on B2C (business to company) business and the regulated markets, which is core to the company's future growth, said Sinha.
For the full interview, watch video
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