Mumbai-based drug major Wockhardt Ltd, which is battling a debt pile of over Rs 3,700 crore, has sold its nutritional businesses and a few facilities to Abbott Laboratories of the US for around $130 million (nearly Rs 626 crore) in cash.
Wockhardt has well-known products in the paediatric nutritional category such as Farex, Dexolac and Nusobee infant formulas. The transaction also includes nutrition manufacturing facilities in Lalru and Jagraon. Wockhardt had acquired nutritional supplement maker Dumex India Pvt Ltd, along with its products Protinex and Farex, in June 2006.
Wockhardt, as part of its exit from non-core businesses, had earlier sold its German business Espharma to Germany?s Mova GmbH, a subsidiary of Lindopharm GmbH. It also recently sold its animal health division to French company Vetoquinol for around Rs 170 crore. In March this year, Wockhardt had decided to restructure its corporate debt by making a reference to the corporate debt-restructuring cell through banker ICICI Bank Ltd.
Abbott has confirmed it would acquire Wockhardt?s nutrition businesses, Carol Info Services Ltd, and certain Wockhardt subsidiaries and group companies. The acquisition includes around 600 employees. Abbott expects the transactions to close in the second half of 2009, but they are not being conducted by its publicly traded subsidiary, Abbott India Ltd, it said.
Wockhardt Ltd chairman Habil Khorakiwala said, ?We have captured fair value for this divestment and Wockhardt will continue to grow and show robust results.?
Abbott offers Isomil, PediaSure, Ensure and Glucerna in India and plans to introduce additional products from its broadbased nutritional portfolio to Indian consumers in the coming years, said the Abbott statement.
?This acquisition is an excellent strategic fit for Abbott to accelerate growth of its nutrition business in India, where the nutritional market is expected to experience strong growth in the coming years,? said Holger Liepmann, executive vice-president of global nutrition at Abbott.
Wockhardt, which has been in talks with Delhi-based Fortis to divest a controlling stake in its hospital group, Wockhardt Hospitals, is yet to conclude the deal. According to rating and advisory firm Crisil, as on December 31, 2008, Wockhardt?s debt rose to Rs 3,777 crore, against Rs 2,910 crore a year earlier.
Habil Khorakiwala and his family, who hold 75% in the company, also pledged 40% shares in Wockhardt to financial institutions including IL&FS to raise around Rs 350 crore.
On Tuesday, Wockhardt shares were up 2.80%, or Rs 4.20, to Rs 154.30 on the BSE. Abbott India shares were traded on the BSE at Rs 486.90, up 0.61%, or Rs 2.950.