Global pharma major, Sanofi's Indian arm informed on Friday that it would be divesting its Soframycin and Sofradex brands to Encube Ehticals for a total consideration of Rs 125 crores. Upon the completion of the transaction, Encube would acquire the right to sell and distribute the two skin ailment creams in India and Sri Lanka. In a regulatory filing to the Bombay Stock Exchange, the company inform the company's board has also approved the transfer of the unregistered IP and product inventory to Encube. It added that the transaction would be subjected to working capital adjustments, if required, as per the terms that would be set out in the asset purchase agreement.
"This asset sale does not involve the transfer of any employees and is not expected to create any disruption in supplies to customers and patients," the company stated in the regulatory filing.
Sanofi India expects to close the transaction within the next three months.
According to the company, the two skin ailment ointments are manufactured by third parties and distributed by the company. The pharma major mentioned that the total revenue accruing from these brands represented 2.6 per cent of the total sales in FY20. Moreover, it contributed 0.2 per cent of the net worth of the company as of December 31, 2020.
The board informed that the company would not be entitled to distribute products under the two brands upon completion of the divestment.
At the time of publishing, shares of the pharma major were trading 2.10 per cent higher at Rs 8,348.05 on the BSE. On the NSE, the stock was 1.52 per cent higher at Rs 8,306.
The company's Indian arm registered net sales went 9.89 per cent on a year-over-year basis to reach Rs 754.50 crore in the September-end quarter. Net Profit nearly quadrupled to reach Rs 529.80 crore in the same period.
