Drug firm Sanofi India on Wednesday said its board has approved the demerger of its consumer healthcare business into a separate entity.
The company’s board has approved the Scheme of Arrangement between Sanofi India Ltd (SIL) and its wholly-owned subsidiary Sanofi Consumer Healthcare India Ltd (SCHIL), the drug maker said in a statement.
The initiative is to demerge SIL’s consumer healthcare business into a legal entity, SCHIL, subject to approval by shareholders and regulators, it added.
This decision will open new gates for the India business and employees in a value-driven move to accelerate growth for both the pharmaceuticals business (SIL) and consumer healthcare business (SCHIL) in India, the drug maker said.
Upon completion of the proposed demerger, Sanofi will continue to own 60.4 per cent stake in both entities and SIL shareholders will receive 1:1 SCHIL equity share of Rs 10 each, for each equity share owned.
"This is a momentous opportunity as it will allow Sanofi to unlock and maximise its business potential in both pharmaceuticals and consumer healthcare, with the right assets, structure, and strategy," Sanofi India Managing Director Rodolfo Hrosz said.
The pharmaceuticals business will focus on its long-term success factors, expanding its portfolio of life-changing treatments available in India, and accelerating its digital transformation to improve the lives of patients in India, he added.
The proposed consumer healthcare business would focus on consumer-centric strategies and best-in-class digital and ecommerce capabilities, Hrosz said Sanofi’s consumer healthcare business’ annual turnover for FY2022 stood at Rs 730 crore.
The company’s top consumer healthcare brands include Allegra, DePURA, Avil, and Combiflam.
SCHIL is expected to be fully operational by the second half of 2024, subject to necessary approvals.
"The proposed demerger will help both entities build a sustainable growth model. Today, Sanofi is in a strengthened position in India, allowing us to deliver better value to our shareholders and other stakeholders," SIL Chairman of the Board Aditya Narayan said.
Other businesses of Sanofi in India, such as vaccines and clinical studies are not part of SIL and hence, are not impacted by this announcement, the company stated.
