Biocon Biologics, a subsidiary of Biocon, announced on Monday that it will acquire Viatris’ biosimilars business in a $3.3 billion cash and stock deal.
Viatris will receive cash consideration of $2 billion on closing of the transaction and up to $335 million as additional payments expected to be paid in 2024. Additionally, upon closing of the transaction, BBL will issue $1 billion of compulsorily convertible preference shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9 per cent in the company, on a fully diluted basis.
The Board of Directors of both companies have approved the transaction.
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics (BBL), said: “This acquisition is transformational and will create a unique fully integrated, world leading biosimilars enterprise.”
“This strategic combination brings together the complementary capabilities and strengths of both partners and prepares us for the next decade of value creation for all our stakeholders,” she added.
The transaction is expected to close in the second half of 2022, subject to satisfaction of closing conditions (including certain regulatory approvals). The companies will also enter into a Transition Services Agreement, pursuant to which Viatris will provide certain transition services, including commercialization services, for an expected two-year period. Viatris also will pay $50 million to BBL to fund certain capital expenditures.
With the deal, BBL will acquire Viatris’ global commercial infrastructure in developed and emerging markets, its global biosimilars business with an estimated revenue of $875 million and EBITDA of $200 million for CY 2022 and estimated to exceed $1 billion in revenue next year.
BBL will also obtain Viatris’ rights in all biosimilars assets, including its in-licensed portfolio and an option to acquire Viatris’ rights in bAflibercept.
The cash payment of $2 billion to be funded by $800 million raised through equity infusion in BBL and the remainder to be funded by debt, additional equity or a combination thereof. BBL has received expressions of interest from financial institutions for debt financing and equity commitments from existing shareholders.
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