Apollo Hospitals’ Pharma Business Rejig Gets Competition Commission’s Clearance
Apollo Pharmacy Ltd. will be wholly-owned by Apollo Medicals in which Apollo Hospitals will have a 25.5 percent stake.
The Competition Commission of India on Monday said it has approved the restructuring of Apollo Hospitals Enterprise Ltd.'s pharmacy business and its subsequent acquisition by certain investors.
Apollo Hospitals in November 2018 had announced that it would divest its front-end pharmacy business to Apollo Pharmacy for a lump sum cash consideration of Rs 527.8 crore as part of a restructuring exercise.
Following the transaction, Apollo Pharmacy Ltd. will be a wholly-owned subsidiary of Apollo Medicals Pvt. Ltd. in which Apollo Hospitals will have a 25.5 percent stake.
The other three investors in Apollo Medicals will be ENAM Securities with 44.7 percent stake, Jhelum Investment Fund 1 with 19.9 percent stake and Hemendra Kothari with 9.9 percent stake, it had said.
The CCI in a tweet on Monday said it “approves restructuring of pharmacy business of Apollo Hospitals Enterprise Limited and its subsequent acquisition by Enam Securities Private Limited, Jhelum Investment Fund I, and Hemendra Kothari”.
Under the new structure, Apollo Hospitals will be the exclusive supplier for Apollo Pharmacy under a long-term supplier agreement. Apollo Hospitals will enter into a brand licensing agreement to license the "Apollo Pharmacy" brand to the front-end stores and online pharmacy operations.
The move followed a review of long-term strategy for both health care services and standalone pharmacies of the company, the firm had said.
Besides, in a separate tweet on Monday, the fair trade regulator said it "approves acquisition of up to 25.02 percent share of Federal-Mogul Goetze by Icahn Enterprises, American Entertainment and IEH FMGI Holdings".
Federal-Mogul Goetze Ltd. is engaged in the manufacture and sale of auto components in India, used for automotive, locomotive and industrial applications, a combination notice filed with CCI said.
Icahn Enterprises and American Entertainment Properties Corp are diversified holding companies engaged in various businesses including investment, automotive, and energy among others, while IEH FMGI Holdings is a wholly-owned subsidiary of American Entertainment, it added.