Mérieux Alliance, a France based 1.2 billion euro biotech company, has acquired 60 per cent controlling stake in the Hyderabad based biotech company Shantha Biotechnics for an undisclosed sum.
Mérieux Alliance bought over 50 per cent of the stake invested in Shantha by a group of financial investors from Oman, besides 10 per cent stake from a non-resident Indian. Both Dr Varaprasad Reddy, managing director of Shantha and the spokesperson of Mérieux Alliance declined to divulge the deal size. Both re-iterated the takeover was not hostile and was done with the "knowledge of all stakeholders".
Dr Reddy will continue as managing director and Georges Hibon, director of bioMérieux, which is a one of the four group companies under Mérieux Alliance, will take over as chairman of Shantha Biotechnics. Tecnova, a New Delhi based advisory was the adviser of Mérieux Alliance management in the deal.
"When we started, it was a 50:50 joint venture and the Omani group of investors had invested about US $ 2.5 million in Shantha over the years since 1983. Mérieux Alliance took over their share plus 10 per cent stake belonging to an NRI. Rest of the stake is with me and our Indian partners. It is a private affair and it is not fair on my part to reveal the quantum of investment. I can only say that the investment by a biotechnology major like Mérieux Alliance, instead for a group of financial investors, augurs well for the growth of Shantha," Dr Reddy told Pharmabiz.
It was reported few years ago that Shantha had put on block a strategic stake and more than 25 companies were in race for the most promising Indian biotech company. The names included drug majors like Ranbaxy, Nicholas Piramal, Novartis and Aventis Pharma. Shantha had off-loaded 10 per cent of the stake belonging to Morgan & Stanley and SBI Caps in the year 2000.
Founded by Dr Varaprasad Reddy in Hyderabad in 1993, Shantha Biotechnics was India's first bio-pharmaceuticals company to develop, manufacture and market a recombinant hepatitis B vaccine in 1997. It then expanded its portfolio with other combination vaccines, as well as with therapeutic proteins and monoclonal antibodies. It has a high level R&D team and a bio production potential which conforms to the strictest international quality norms. Shantha Biotechnics employs nearly 650 people, over 125 of whom are dedicated to R&D. For 2006/2007, its turnover is set to exceed 20 million euros, informed a release from Mérieux Alliance.
"This Indo-French alliance is likely to favour synergies in terms of research and clinical development between the group's companies. Shantha Biotechnics will also have access to the support provided by Mérieux Alliance's international network. Shantha will become our worldwide decision centre for our prophylactic vaccine activities," said Alain Mérieux, president of Mérieux Alliance.
Mérieux Alliance comprises four companies bioMérieux, Silliker, Transgene and Advanced BioSciences Laboratories, with controlling stake belonging to the family of Alain Mérieux.
bioMérieux, in which it has a 59 per cent stake, is based in Marcy l'Etoile, France and is a global player in the field of in vitro diagnostics (diagnostics, prognosis and clinical monitoring) and in industrial microbiological controls. BioMérieux employs over 5,500 people in 150 countries and has a turnover of 991.3 million euros. The Chicago based Silliker has a chain of laboratories which provide prevention against infections upstream through food quality control. With a turnover of 123 million euros, it is one of the world's foremost companies in this field and ranks first in the US and in France. Silliker has a presence in 10 countries via a network of 38 laboratories and employs around 2,500 people. Transgene is a company which is quoted on Eurolist and is based in Strasbourg, France. It is dedicated to immunology as applied in treating cancer and infectious diseases. The Washington based ABL (Advanced BioSciences Laboratories is a research company specialising in pre-clinical development of vaccines for infectious diseases, in particular AIDS. Mérieux Alliance as a group employs around 8,400 people worldwide and its turnover for 2005 was 1.128 billion euros, informed company sources.