Mumbai: Claris Lifesciences Ltd’s board on Monday approved the sale of its entire 20% stake in a joint venture (JV), Otsuka Pharmaceutical India Pvt. Ltd, to partner Otsuka Pharmaceutical Factory Inc for $20 million.
Japanese firm Otsuka Pharmaceutical Factory currently holds 60% stake in the JV, while Mitsui & Co Ltd holds 20%.
“As a long term strategic business decision, the company has decided to disinvest its entire stake in the joint venture company,” Claris Lifesciences said in a stock exchange filing.
The closure of the deal is subject to certain regulatory approvals, including a nod from the Foreign Investment Promotion Board (FIPB), the company said.
Shares of Claris Lifesciences closed 1.3% higher at Rs347 on the BSE, while the benchmark Sensex index ended up 0.2% at 29926.15 points on Monday.
“This divestment (in JV) is timely, in fact a bit earlier than we expected. We can now look forward to the company devising an efficient mechanism to return cash to minority shareholders post the closure of injectables business divestment to Baxter,” Vishal Manchanda, research analyst at Nirmal Bang Securities, said.
In December 2016, Claris Lifesciences announced the sale of its global generic injectables business to US-based Baxter International Inc. for $625 million. The Ahmedabad-based company had said it intends to share a significant majority of net cash proceeds from the sale with shareholders.
On 17 April, India’s FIPB gave its nod for Claris Lifesciences’s injectables business sale to Baxter. The companies are now awaiting approval of the US competition watchdog, Federal Trade Commission, for closing the deal.