Dr. Reddy’s Laboratories Ltd has acquired a certain portfolio of the Wockhardt’s business in India, and few other international territories of Nepal, Sri Lanka, Bhutan, and the Maldives. A business portfolio comprising of 62 brands in multiple therapy areas such as respiratory, neurology, dermatology, vaccines, etc, would be transferred to Dr. Reddy’s. Also, the related sales, marketing teams, and a manufacturing unit which is located in Himachal Pradesh with all its employees, together as a business undertaking would be transferred.
The COVID19 and consequent government restrictions have led to a decline in revenue from the sales of the products forming part of the business undertaking, throughout March and April. Consequently, a revision to the BTA was made whereby Dr. Reddy’s and Wockhardt agreed that the deal consideration shall now be up to ₹1,850 crores. This will be paid in phases, of Rs 1,483 crores on the date of closing, ₹67 crores to be deposited in an escrow account which shall be released subject to adjustments in net working capital, employee liabilities, and certain other contractual and statutory liabilities. The remaining holdback amount of Rs 300 crores will be issued when revenue from sales of the products during the 12 months post-closing exceeds Rs 480 crores. Dr. Reddy’s will be required to pay to Wockhardt an amount equal to two times the amount by which the revenue exceeds ₹480 crores, subject to the maximum of the holdback amount.
G V Prasad, MD and Co-Chairman of Dr. Reddy’s asserted that this deal is in line with the company’s strategic focus on India and has paved a path for advanced growth and leadership in the domestic market. “We believe that the acquired portfolio offers great growth potential and we also welcome the employees joining us from Wockhardt to the family of Dr. Reddy’s,” he said.
Wockhardt Ltd is a global pharmaceutical and biotechnology company headquartered in Mumbai, India. They have manufacturing plants in India, UK, Ireland, France, and the US. It has a significant presence in emerging markets such as Russia, Brazil, Mexico, Vietnam, Philippines, Nigeria, Kenya, Ghana, Tanzania, Uganda, Nepal, Myanmar, Sri Lanka, Mauritius, Lebanon, and Kuwait. They offer formulations, biopharmaceuticals, nutrition products, vaccines, and active pharmaceutical ingredients (APIs). Wockhardt Group’s subsidiaries include Wockhardt Hospitals and Wockhardt Global School.