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Serum Institute’s Poonawalla family refused billion-dollar deal in October 2020 - here is why: Report

In September 2020, the Bill and Melinda Gates Foundation provided $150 million to the Pune-based vaccine-maker to fund the additional 10 crore COVID-19 vaccine doses.

May 05, 2021 / 10:24 AM IST
Poonawalla family refused the offer from a consortium of private equity firm like TPG Capital, Abu Dhabi's ADQ and Saudi Arabia's Public Investment Fund (PIF)

Poonawalla family refused the offer from a consortium of private equity firm like TPG Capital, Abu Dhabi's ADQ and Saudi Arabia's Public Investment Fund (PIF)

Eyeing a higher valuation for Serum Institute of India than that offered by a host of marquee investors, the Poonawalla family withdrew from a billion-dollar deal at the last minute in October 2020.

Poonawallas refused an offer from a consortium of private equity firm like TPG Capital, Abu Dhabi's ADQ and Saudi Arabia's Public Investment Fund (PIF) owing to differences over valuation, the Hindustan Times reported, citing people in the know.

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"The Poonawalla family sought a $10 billion valuation for its new subsidiary under which the commercial interests of SII's upcoming vaccines, including the COVID-19 vaccines, was to be housed. However, they changed their mind and refused the equity infusion," a source told the publication.

The decision was made at a time when the Serum Institute was struggling to boost production for the Covishiled vaccines.

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"The primary reason was clearly valuation as the family expected an even higher valuation given the margins it was expected to generate from vaccine sales," the source added.

Moneycontrol could not independently verify the report.

HT's request for comment sent to Adar Poonawalla, TPG Capital and ADQ remained unanswered, while a PIF spokesperson declined to comment.

Read | COVID-19 vaccine shortage in India will continue till July, says Serum Institute CEO Adar Poonawalla

The decision to not divest stake in SII could also have been influenced by the aid given by Bill and Melinda Gates Foundation.

In September 2020, the Bill and Melinda Gates Foundation provided $150 million to the Pune-base vaccine maker to fund the additional 10 crore COVID-19 vaccine doses for low and middle-income countries.

SII has signed pacts with multiple pharma companies, including AstraZeneca and Novavax, to develop and produce COVID-19 vaccines.

CEO Adar Poonawalla recently said that India's coronavirus vaccine shortage would continue through July. He said that the shortage would continue through July when production was expected to increase from about 60-70 million doses a month to 100 million.

Click here for Moneycontrol's full coverage of the COVID-19 pandemic
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first published: May 5, 2021 10:24 am

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