Suven: Cabinet okays FDI of up to Rs 9,589 crore for 76.1% stake in Hyderabad-based Suven Pharma
HYDERABAD: The Cabinet Committee on Economic Affairs (CCEA) has given its seal of approval to a foreign direct investment (FDI) of up to Rs 9,589 crore in Hyderabad-based Suven Pharmaceuticals Ltd by Cyprus-based Berhyanda Ltd for a 76.1% stake.
The Cyprus-based entity is controlled by Advent Funds, which are managed by US-based private equity player Advent International Corporation.
The CCEA, which is chaired by Prime Minister Narendra Modi, gave its nod on Wednesday after the proposal was evaluated and cleared by various departments and regulatory bodies such as Securities & Exchange Board of India (Sebi), Reserve Bank of India (RBI) and the Competition Commission of India (CCI).
The deal necessitated government approval as currently, under the existing policy, FDI of up to only 74% is allowed in brownfield pharma projects under the automatic route. The approval, however, is subject to fulfilment of all the rules and regulations applicable.
The CCEA nod came over eight months after Suven Pharma’s promoters, the Jasti family and entities held by them, inked a definitive agreement with Advent International to sell their 50.1% stake in the CDMO (contract development and manufacturing organisation) player for a consideration of Rs 6,300 crore at a price of Rs 495 per share.
The Jasti family and promoter group holds 60% stake in Suven Pharmaceuticals, which is listed on the Bombay Stock Exchange and National Stock Exchange, as of the quarter ended June 30, 2023, with the remaining 40% held by the public.
Advent will be making an open offer to acquire an additional 26% stake in the company from public shareholders, taking its total holding in Suven Pharma to 76.1% and may even hike its stake up to 90.1%.
Advent had said earlier that post the completion of the acquisition, it would explore the merger of its portfolio company Cohance Lifesciences with Suven as part of its strategy to build a leading end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets.
The Cyprus-based entity is controlled by Advent Funds, which are managed by US-based private equity player Advent International Corporation.
The CCEA, which is chaired by Prime Minister Narendra Modi, gave its nod on Wednesday after the proposal was evaluated and cleared by various departments and regulatory bodies such as Securities & Exchange Board of India (Sebi), Reserve Bank of India (RBI) and the Competition Commission of India (CCI).
The deal necessitated government approval as currently, under the existing policy, FDI of up to only 74% is allowed in brownfield pharma projects under the automatic route. The approval, however, is subject to fulfilment of all the rules and regulations applicable.
The CCEA nod came over eight months after Suven Pharma’s promoters, the Jasti family and entities held by them, inked a definitive agreement with Advent International to sell their 50.1% stake in the CDMO (contract development and manufacturing organisation) player for a consideration of Rs 6,300 crore at a price of Rs 495 per share.
The Jasti family and promoter group holds 60% stake in Suven Pharmaceuticals, which is listed on the Bombay Stock Exchange and National Stock Exchange, as of the quarter ended June 30, 2023, with the remaining 40% held by the public.
Advent will be making an open offer to acquire an additional 26% stake in the company from public shareholders, taking its total holding in Suven Pharma to 76.1% and may even hike its stake up to 90.1%.
Advent had said earlier that post the completion of the acquisition, it would explore the merger of its portfolio company Cohance Lifesciences with Suven as part of its strategy to build a leading end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets.
