Strides Arcolab’s specialties subsidiary, Agila Specialties Private Limited and its overseas arm Agila Specialties Asia Pte. Limited is now a part of the US-based Mylan Inc. This follows the prime minister Manmohan Singh having cleared the foreign direct investment (FDI) of Strides Arcolab-Mylan deal, superseding the apprehension raised by Department of Industrial Policy and Promotion (DIPP) and Ministry of Health.
It is gathered that the Foreign Investment Promotion Board (FIPB) had placed its clearance on the Strides Mylan deal in cold storage until there was ample clarity on brownfield project status under the FDI norms only because the buyout was built in as a new project proposal. Now, the deal will be brought to the Cabinet Committee on Economic Affairs (CCEA) under existing policy to get the final approval.
In the meanwhile, in the last couple of days, there was ample pressure by the DIPP which was trying to convince the PMO that brownfield investment in pharmaceuticals would mar the growth of the domestic companies. There were also fears on whether the speciality injectables for oncology drugs made in at the Strides-Agila plant in Bengaluru would impact the domestic availability.
It was in February this year, that Strides entered into a definitive agreement for sale of its Agila Specialties Private Limited and Agila Specialties Asia Pte. Limited, Singapore to Mylan Inc. This is the third largest acquisition deal in the country after the Ranbaxy-Daichii ($4.6 billion in June 2008) and Abbott-Piramal ($3.72 billion in September 2010). However, it was also indicated that the transactions will be completed within six months, based on FIPB approval.