Strides’ shares jump as govt. clears Mylan’s proposal to buy Agila subsidiary

Strides’ shares jump as govt. clears Mylan’s proposal to buy Agila subsidiary Shares of Strides Arcolab opened at a gain of 3 per cent at Rs 919 apiece in Wednesday morning trade, thanks to the government's approval for U. S.-based Mylan Inc's proposal to acquire the company's subsidiary Agila Specialties.

Mylan has agreed to acquire Strides Arcolab's Bangalore-based pharmaceuticals unit Agila Specialties for Rs 5,168-crore.

The Cabinet Committee of Economic Affairs (CCEA) cleared the proposal in a meeting on Tuesday. Though, the acquisition of the injectible medicine business is subject to a number of conditions.

As the conditions, the American firm will have to maintain the level of investment in research and development (R&D) in value terms for a period of at least five years at exact quantitative level recorded at the time of induction of foreign direct investment.

Moreover, Mylan will have to maintain the production level of National List of Essential Medicines (NLEM) drugs as well as their supply in the domestic market at the time of induction of FDI for at least five years.

The deal between Mylan and Arcolab was cleared by the Foreign Investment Promotion Board (FIPB) in August this year.