Since Matrix is largely an active pharmaceutical ingredients (API) player and Strides a generics and OTC player, the merged entity will be a vertically-integrated organisation that will draw synergies from the two organisations. The boards of Matrix and Strides Arcolab met separately in Delhi and Hyderabad and have agreed in principle to the proposed plan of merger.
Both the companies have appointed independent chartered accountant firms to conduct due diligence of each of their companies, Mr N Prasad, chairman and CEO of Matrix, told a group of reporters immediately after the board meeting at Hyderabad. Mr Prasad declined to give any details of share swap or financials. But market sources reckon that it would be in the ratio of 1:3 between Matrix and Strides shares.
According to a combined press release, the boards of both companies have proposed to meet again in the next six to eight weeks (presumably after due diligence) for other regulatory approvals. The combined entity is christened “Matrix Strides Ltd” and becomes one of the largest integrated pharmaceutical companies in India. Matrix Strides will have six API facilities (four USFDA approved), five drug intermediate plants and nine (two USFDA approved) formulation units.
From day one, the company will be operational in over 70 countries with manufacturing operations in India, USA and Latin America. On the research and development front, the new entity is expected to complete 70 DMF (Drug Master File) filings and 20 ANDA filings by the end of the current year. In a joint statement issued by both the companies, N Prasad of Matrix and Arun Kumar of Strides Arcolab said: “The coming together of two leading first generation pharmaceutical companies with similar philosophies and vision will create a significant generic company based out of India. Matrix Strides will have significant presence in all the value chains of an integrated life sciences Company.
The proposed merger of the two companies will compliment each other’s strengths and will emerge as a leader in the global generic space, leveraging Indian innovation and a strong global partnering philosophy.” Meanwhile, Strides Arcolab has also announced that the board of directors has approved the proposal to acquire up to 60% stake in Biopharma, a Venezuelean pharmaceutical and marketing Company.
