Strides Shasun, Apotex to merge Australian ops to create biggest generics player

Pharma player Strides Shasun said it has agreed in principle to merge its Australian business with the Australian operations of peer Apotex.

Both have substantial businesses in Australia; Strides under the Arrow brand and Apotex under its primary brand.

The merger will enable Strides, through the merged business, to become the leading player in the Australian generic pharmaceutical market by both volume and revenue,” the company said.

The merged business will have the largest portfolio of owned product IP for the Australian market, it added, and said synergies will accrue through higher volumes and improved cost of goods sold.

The merged business will be led by Dennis Bastas of Arrow as Executive Chairman, Roger Millichamp of Apotex as CEO and Andrew Burgess of Arrow, as CFO.

The proposed structure will be arrived through a share swap, the Indian company said. The hospital business of Apotex will not form part of the merged entity and will be retained by Apotex.

Strides and Apotex business will be run independently under the brands Arrow and Apotex respectively and continue to enjoy preferred partner relationship with their respective wholesalers.

The merged business will be supplied by Strides’ and Apotex’s manufacturing facilities and will have around 3200 first line pharmacy accounts.

“Both companies are currently in a strong commercial position, but will be better positioned to meet the future challenges of the Australian pharmaceutical industry following the merger,” said Roger Millichamp.

“The proposed merger will take the best of both companies, optimize our shared cost base, and maintain the viability of our operations through more effective delivery of medicines and services to consumers and patients.”

The deal is subject to entering into definitive agreement between the parties, satisfactory due diligence, customary closing conditions and statutory approvals, including approval of Australian Competition and Consumer Commission (ACCC).

Strides said the transaction will be EPS accretive from Year 1 through merger synergies.