Glenmark Pharmaceuticals shares initially rose by 1.4 percent but later reversed their gains to trade slightly in the negative on December 20. This shift occurred after the Competition Commission of India (CCI) approved Nirma's acquisition of the majority shareholding in the subsidiary Glenmark Life Sciences.
"CCI approves acquisition of majority shareholding of Glenmark Life Sciences Limited by Nirma Ltd," the competition watchdog said in a post on social media platform X (formerly known as Twitter).
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The deals beyond a certain threshold require approval from the regulator, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.
As of 12:25 pm, shares of Glenmark Pharmaceuticals were trading at Rs 823.50 on the NSE, lower by 0.01 percent. Glenmark Life Sciences shares were in the red as well, down over one percent.
In September this year, Glenmark Pharmaceuticals said its board has approved to divest 75 per cent stake in its subsidiary GLS to Nirma Ltd for Rs 5,651.5 crore.
As of June 30, Glenmark Pharmaceuticals held an 82.84 percent stake in the company. Glenmark Pharmaceuticals chairman and managing director Glenn Saldanha said in an earnings conference call for Q1FY24, “We have a 7-8 percent sell-down requirement by law and we are working on it.”
The Securities and Exchange Board of India (SEBI) mandates that promoters can’t hold more than 75 percent in a company.
“Glenmark has three years to bring the public shareholding to 25 percent, and the timeline is up to August 2024,” Glenmark Pharma’s executive director and global chief financial officer VS Mani said in the call.
Glenmark Life Sciences (GLS) is engaged in the business of development, manufacturing and sale of Active Pharmaceutical Ingredients (APIs) and intermediaries and contract development and manufacture organisation (CDMO) services for APIs.
Ahmedabad-based Nirma is known for its detergents, soap, and dishwashing bars. It is also into the manufacturing of industrial products like soda ash, linear alkyl benzene, alfa olefin sulphonates, fatty acid, glycerine, and sulphuric acid.
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