Zydus Lifesciences Acquires Sterling Biotech's API Business for ₹84 Crore

18 Sep 2024 , 11:24 AM

Zydus Lifesciences shares faced selling pressure during the September 17 trading session following the board’s approval to acquire the API business of Sterling Biotech for ₹84 crore.

The acquisition announcement follows the company’s earlier decision to buy a 50% stake in Sterling Biotech.

In a regulatory filing, the company stated that its board approved a Business Transfer Agreement (BTA) on September 17 to purchase the API business of Sterling Biotech Ltd. (SBL).

The purchase will be on a slump sale basis, treating it as a going concern, with a cash-free and debt-free transaction at a lump-sum consideration of ₹840 million.

At the time of writing on September 18, 2024, at 11:23 am, Zydus Lifesciences stock is trading at ₹1099, reflecting a 1.08% dip from the previous closing price. Over the past year, Zydus Lifesciences stock has risen by an impressive 70%, and it has gained 57% since the beginning of the current year.

Zydus Lifesciences emphasized that Sterling Biotech’s API business is a strategic fit, particularly due to its fermentation-based products portfolio and a manufacturing facility at Masar, Gujarat. This facility is near Zydus’ existing plant in Dabhasa, enabling better strategic alignment.

Earlier, Zydus Lifesciences acquired a 50% stake in Sterling Biotech from Perfect Day for ₹550 crore.

Sterling Biotech is known for producing pharmaceutical gelatin, di-calcium phosphate (DCP), and APIs like lovastatin, doxorubicin, epirubicin, and daunorubicin. In 2012, Sterling Biotech was one of the largest gelatin producers globally, holding a 6.5% market share.