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Transfer of ownership of Dutch co will be completed by year-end

Virendra Pandit

Ahmedabad, July 9 Ahmedabad-based Dishman Pharmaceuticals and Chemicals Ltd (DCCL) has signed a Memorandum of Understanding (MoU) with Solvay Pharmaceuticals BV, the Netherlands, to acquire its non-core businesses of fine chemicals, Vitamin-D and Vitamin-D analogues, for an undisclosed amount.

The DCCL President (Finance), Mr N.D. Shah, told Business Line here on Monday that Solvay’s sales of these non-core items in 2006 was worth €16 million. As part of this deal, all facilities, the 44-strong staff, and acti vities located at Solvay’s Veenendaal site in the Netherlands, and technology, patent and intellectual property rights for fine chemicals, Vitamin-D and Vitamin-D analogues business will be transferred to Dishman.

This would be done after satisfactory completion of due diligence procedures, approval from the relevant authorities and appropriate employee information procedures. The transfer of ownership will be completed by the end of 2007, when Dishman will be in total command. The company, which had an investors’ conference on Monday, had also informed the Bombay Stock Exchange, Mr Shah said.

The intended sale of Solvay’s site in Veenendaal is a result of the European company’s strategy to focus on the main therapeutic area of cardiometabolic and neuroscience treatments and hive off the non-core business, whose sale will now be transferred to Dishman.

Dishman has had a pre-existing long-term relationship with Solvay for contract manufacturing of a patented API and intermediates and, in 2001, the company and Solvay had entered into Toll Manufacturing Agreement to convert a raw material supplied by Solvay into an intermediate of Vitamin D-3.

With the experience gained and technology available with the company, the acquired business will add value to the company’s business. According to Mr J.R. Vyas, Managing Director, acquisition of cholesterol, Vitamin D and Vitamin D analogues business will not only increase the basket of products of Dishman but also bring new customer relationships.

Asked whether sourcing for these products will now be shifted to India completely following the deal and the company’s future plans for these products, Mr Shah said these would be finalised in about a month’s time.

The Veenendaal site of Solvay Pharmaceuticals houses the business group of Vitamins and Chemicals. The main activities of this group are the production, marketing and sales of cholesterol and cholesterol-related products.

The manufacturing of Vitamin D analogues takes place at Solvay’s site in Weesp. Cholesterol is used in pharmaceutical, cosmetic and crustacean feed applications. Vitamin D analogues are used for food and pharmaceutical applications, and fall in the category of high potency products.

The company will retain production of cholesterol and Vitamin D analogues at Veenendaal and transfer the Vitamin D3 production to its Indian plants.

Dishman’s manufacturing plants and research facilities are spread across two locations in Gujarat. It has an approved USFDA facility, a global network in the USA, UK, Europe, Middle East, Africa, Japan and China to secure and service customers globally.

In 2006, Dishman had acquired Carbogen Amcis, a Switzerland-based contract research and manufacturing facility, which is fully integrated.

More Stories on : Mergers & Acquisitions | Pharmaceuticals | Overseas Investments

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