Mumbai, March 2 : The board of pharmaceutical company, Novartis India, is scheduled to meet on March 9 to consider and approve the scheme of amalgamation of group company Ciba CKD Biochem with itself. The company has notified the stock exchange about its plans.Novartis India had recently hiked its holding in Ciba CKD to 78.65 per cent from 28.1 per cent by acquiring around 7,746,900 shares from Korean fermentation major Chong Kun Dang (CKD) and another 4,03,000 shares from American International Group (AIG) subsidiary, Keenan. Novartis AG controls roughly 6.6 per cent of Ciba CKD's equity capital while the rest is divided between Walden and other shareholders.
Ciba-CKD Biochem essentially manufactures rifampicin bulk and its intermediates - key ingredients that go into anti-tuberculosis drugs. The proposed amalgamation of Ciba CKD with Novartis is expected to give the Swiss giant an integrated presence in the anti-TB drugs segment. Novartis India has 16 anti-TB formulations in its product arsenal and is ranked second in the domestic anti-TB drugs market. Novartis controls roughly 12 per cent of the anti-TB drugs market, well-behind that of market leader Lupin Laboratories.
"The company will have better control over input costs, inventory etc with the amalgamation though the implications on the workforce front is not very clear," an analyst said. Details on the number of employees Ciba CKD would bring with it and the company's financial health could not be got.Ciba CKD was at one time considering a public issue and had even made a preferential offer to the employees of the erstwhile Hindustan Ciba Geigy and Ciba CKD.
The Novartis scrip which was quoting at roughly Rs 390 on the Bombay Stock Exchange (BSE) around mid-session closed at Rs 360. At the National Stock Exchange, the scrip opened at Rs 430 and moved up to a high of Rs 434.25, but closed lower at Rs 370.10.
Novartis India had earlier spun off its agribusiness into a separate entity, Novartis Agribusiness India Pvt Ltd, as part of an effort to revamp its domestic operations in line with the global business structure. Internationally, the Novartis group and AstraZeneca Plc had in December 1999 agreed to spin off and merge Novartis' crop protection and seeds business with Zeneca Agrochemicals to create Syngenta AG.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
