Indian CPG Company Nirma to Acquire Glenmark Life Sciences for INR 5,651 Cr

This acquisition marks Nirma's entry into the Active Pharmaceutical Ingredient (API) sector, expanding its pharmaceutical portfolio, which includes injectables, parenterals, and ophthalmic products, making it the company's biggest bet in the pharmaceutical sector.

Ahmedabad-based Nirma has agreed to acquire 75% of Glenmark's active pharmaceutical ingredient (API) unit Glenmark Life Sciences (GLS), with the deal valued at INR 5,651.5 Cr, or INR 615 per share.

This acquisition marks Nirma's entry into the API sector, expanding its pharmaceutical portfolio, which includes injectables, parenterals, and ophthalmic products, making it the company's biggest bet in the pharmaceutical sector.

Reportedly, a new subsidiary under Nirma Ltd will be established to house this unit, separate from the existing subsidiary Aculife Healthcare. Moreover, sources indicate that Standard Chartered Bank, Investec, Axis Bank financed Nirma's transaction.

In terms of ownership, Glenmark Pharma's stake in the leading API platform will decrease from 82.84%. to 7.84%. However, Glenmark Pharma will procure APIs from GLS for a period of five financial years with effect from April 1, 2024.

Upon closure of the agreement deal, Glenmark Pharma's nominees on the board of GLS, namely Glenn Saldanha and VS Mani, will step down, and Nirma will appoint its own nominees. The existing management team will remain in place, as reported by the Economic Times.

Founded in 1969, the Ahmedabad-based company rose to fame with its washing powder brand among its range of products including soaps, cement, and cosmetics among others. However, it set its foot in the pharma industry in 2006.

In 2020, the FMCG company acquired Anjan Drugs, Nirma's first step towards creating a platform for APIs in India. Later, it acquired Optimus Drugs in May 2022 for INR 2000 Cr.

Stericon Pharma, another name on the list, was acquired by Nirma Group in April 2023 with the aim to expand its healthcare presence in India. Thereby making the Glenmark acquisition, with the aim to be positioning itself as one of the top five independent API companies in India. This move further aligns with Nirma's strategic goals and enables the company to leverage indigenous research and development.

Founded in 1977, Glenmark Pharmaceuticals is a generic drug and active pharmaceutical ingredient manufacturer. The company initially sold its products in India, Russia, and Africa. Currently, it has a presence in over 80 countries.

The company recorded a 2% growth in revenue at INR 2,161 Cr in FY23 from FY22. While its net profit rose to INR 467 Cr from INR 418 Cr, up 11%.