Biocon, Mylan biosimilar deal: Biocon may soon announce the purchase of Mylan’s biosimilar business through a cash and equity merger transaction. In a conversation with Moneycontrol, sources aware of this development said that the deal is currently in the final stages. Sources said Adar Poonawalla’s Serum Institute may play a key role in providing cash to Biocon for the purpose of buying a controlling stake in the biosimilar company formed after its merger with Mylan.
Biosimilar business estimated to be worth $10 billion
The equity value of the company, formed after the merger of Biocon Biologics and Mylan’s biosimilar businesses, is estimated to be $10 billion, sources said. Under the deal, Biocon is expected to have a controlling stake in the company and will buy an additional $1.5 billion in shares from Mylan.
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Ongoing talks between Biocon and Serum Institute
Biocon is in talks with Serum Institute to sell its stake in Biocon Biologics for $500 million to raise money for Mylan with the aim of a cash payout of $1.5 billion, the sources said. At the same time, the overseas arm of Biocon Biologics may enter into a loan agreement for $1 billion.
How will Biocon benefit from the deal?
Sources said the Mylan deal will boost Biocon’s business and unlock value. He said the post-merger company would consider going for an IPO under the deal agreement with a valuation of $10 billion. The deal with Biocon and the proposed IPO of the biosimilar business will give Mylan the cash it needs to repay its debt globally. Mylan’s name is now Viatris.
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The companies declined to comment
On email queries sent by Moneycontrol, a Biocon spokesperson said, “We do not comment on market rumours and speculations.” Mylan’s official spokesperson said, “We do not comment on market rumours.” A spokesperson for the Serum Institute said the company had no comment.
Serum Institute holds 15% stake in Biocon Biologics
Adar Poonawalla’s Serum Institute holds a 15 per cent stake in Biocon Biologics under the previously announced Vaccine Alliance. A recent exchange filing said, “Biocon Biologics Ltd. The board has approved the merger of Serum Institute with a new vaccine subsidiary. The deal valued Biocon Biologics at $4.9 billion.
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