CCI okays Shashun Pharma-Strides Arcolab merger

The Competition Commission of India has given its approval to the proposed merger of Chennai-based Shasun Pharmaceuticals with drug maker Strides Arcolab, driving the price of both stocks sharply upward.

"The proposed combination is not likely to have any appreciable adverse effect on competition in India, and therefore, the Commission hereby approves the proposed combination," the CCI said in an order dated 4 March.

Under the proposed deal, Shasun will amalgamate with Strides in an all-stock transaction. The combination of Strides and Shasun would create a company with a turnover of Rs2,500 crore, placing the combined entity among the top 15 listed drug makers.

Shashun shareholders would receive 5 equity shares of Strides for every 16 shares held by them in Shasun. Based on the exchange ratio, Shasun shareholders would own 26 per cent of the combined entity.

Strides is a Bangalore-based firm that develops and manufactures IP-led niche pharmaceutical products. It has eight manufacturing facilities in more than 75 countries.

Incorporated in 1976, Shasun is a global supplier of development and manufacturing services for intermediates, API and formulations to the pharmaceutical industry.