Update: Generic API biz to strengthen post deal says Matrix Labs CEO

28 August 2006

US-based generic pharma company Mylan Labs will pick up about 71.5 per cent stake in Matrix Labs (See: Mylan Labs to acquire Matrix Labs for $736 million). The two pharma companies will proceed with the deal that was being negotiated for at least three months reports CNBC-TV18.

The management of Matrix Labs says that the promoters in Mylan will invest part of the proceeds. N Prasad, executive chairman of Matrix, will invest $25 million, Newbridge $93 million and Temasek will invest $46 million in Mylan.

According to the management, Mylan will look to take shareholding to 71.5 per cent and will announce an open offer soon as it has no plans to delist. The management feels that the generic API biz will strengthen after this deal, which derisks business.

CNBC-TV18 shares with domain-b its exclusive interview with Matrix CEO Rajeev Malik:

What could this deal mean for Matrix's minority shareholders?
I think as far as minority shareholders are concerned, nothing much will change because going forward, the company will be operating on an independent and arm length basis. It will be a listed company and from a business point of view, it will be much more stronger and will de-risk business for Matrix and Matrix shareholders.

What would be the eventual shareholding pattern between Mylan, the private equity investors, the promoters and minority shareholders?
In terms of the shareholding pattern, I think Mylan will be looking forward to take it up to 71-71.5 per cent. There will be no private equity investors going further. There is no agenda of delisting Matrix as of today. There has been no discussion so far and I do not see anything as far as de-listing coming through.