Matrix Laboratories Limited and Strides Arcolab Limited have called off its proposed merger, which was approved in principle by the Board of Directors of both the companies at their meetings on June 1, 2005. The two companies were unable to reach an agreement on valuation.
In a joint statement, N Prasad, executive chairman of Matrix Laboratories, and Arun Kumar, CEO, managing director of Strides, stated, "The intention of merger was based on a strong business strategy and the potential benefits of integration. However, while it is unfortunate that the agreement could not be reached on valuation, the managements of the two companies recognize and will harness the strategic relationship envisaged in the rationale of the merger. Managements of both the companies respect each others businesses and will continue to grow them independently while combining the strengths for mutual benefits."
In line with such mutually beneficial business objective, Strides will license a range of hospital injectable products to Docpharma [recently acquired by Matrix] for Benelux markets and Matrix will further strengthen cooperation agreements in the Anti Retro Viral (ARV) business strategy by enhancing the scope of the present understanding.
According to sources, a financial collaboration could not materialise and hence the merger was called off. The proposed merger was aimed to capitalise on each other's strengths and becoming a major player in the global pharma space. The combined entity with Rs 1000 crore turnover was expected to become the country's seventh largest drug manufacturer, stated sources in the industry.