A day after entering into a definitive agreement with Wockhardt Limited to acquire select divisions of its branded generic business, shares of Dr, Reddy’s Laboratories hit a 52-week high of Rs 3,289.60 up from its opening price of Rs 3,222.75.
A day after entering into a definitive agreement with Wockhardt Limited to acquire select divisions of its branded generic business, shares of Dr, Reddy’s Laboratories hit a 52-week high of Rs 3,289.60 up from its opening price of Rs 3,222.75. The deal, worth Rs 1,850 crore will see Dr. Reddy’s acquire business in countries such as Nepal, Sri lanka, Bhutan, and Maldives. On the other hand share price of Wockhardt were down 3.63 per cent, trading at Rs 353.60.
The business undertaking is being transferred on a slump-sale basis. Dr. Reddy’s will take over a portfolio of “62 brands in multiple therapy areas such as Respiratory, Neurology, VMS, Dermatology, Gastroenterology, Pain and Vaccines,” the company said in a press release. Along with this Dr. Reddy’s will acquire related sales and marketing teams along with a manufacturing plant of Wockhardt located in Baddi, Himachal Pradesh. The deal is expected to close in the first quarter of fiscal year 2020-21.
“India is an important market for us and this acquisition will help in considerably scaling-up our domestic business. We believe the portfolio holds a lot of potential and will get an impetus under Dr. Reddy’s,” said G V Prasad, Co-Chairman and MD of Dr. Reddy’s. The deal will help the company enhance its presence in the high growth therapy areas. Brands like Practin and Zedex will be manufactured by Dr. Reddy’s now.
Shares of Wockhardt had jumped more than 50 per cent in the last one month as investors anticipated a sale of Wockhardt’s assets. However, the share price dropped yesterday and then fell further today after the deal was announced. Benchmark indices S&P BSE Sensex and Nifty-50 were down on Thursday after a strong run in the last two sessions. Sensex was down 169.26 or 0.41 per cent at 41,396.64 points. Nifty-50 was down 0.36 per cent at 12,157.60 points.