Abbott to merge India unit, Solvay Pharma

By Reuters
Posted Nov. 24, 2010 at 10:57 a.m.

Abbott India  on Wednesday agreed to merge Solvay Pharma  into itself, combining two Indian units of U.S.-based Abbott Laboratories’ and sending Abbott India shares to a 52-week high.

Solvay Pharma said its shareholders would get three shares of Abbott India for every two held. Solvay Pharma shares fell more than 13 percent on the news.

Abbott Labs had acquired the global pharmaceutical business of Belgium-based Solvay in September 2009.

“The amalgamation is a logical step in the consummation of the global acquisition of Solvay’s pharmaceutical business by Abbott in 2009,” UBS, which advised Solvay Pharma on the deal, said in a note.

The merged entity would have a combined market share of 11 percent among the multinational pharmaceutical companies in India, it said, adding that the transaction is expected to be completed early next year.

Abbott Labs bought the branded generics business of India’s Piramal Healthcare  for $3.72 billion earlier this year.

Shares of Abbott India closed at 1,472.75 rupees on Wednesday, up 3.32 percent, while shares of Solvay Pharma India ended down 11.49 percent, at 2,351.25 rupees, in a weak Mumbai market.

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