Wednesday, August 3, 2011

Danone to buy Wockhardt's nutrition biz for 250 million euros

French dairy and nutrition major Danone will acquire the nutrition business of Wockhardt Group for 250 million euros (about Rs 1,575 crore), paving the way for its entry into the baby and medical nutrition markets in India.

Wockhardt, which said that the deal is subject to customary closing conditions and various approvals, owns brands like Farex, Protinex, Dexolac and Nusobee. Danone , in its statement, added that credibility of these brands with healthcare professionals in the country will accelerate Danone's entry into the country's baby nutrition market.

Moreover, the nutritional supplement brand Protinex will give Danone a strong foundation for developing its medical nutrition business, the statement said, adding that India is the fastest-growing infant nutrition market in the world, with over 25 million children born each year. According to reports, Wockhardt may use this money to retire part of its over Rs 3,000-crore debt.

However,this could not be immediately verified from the Indian pharmaceutical and biotechnology major, which has a 5 research centres and 21 world-class manufacturing plants in India, US, UK, France and Ireland.

Wockhardt had in July 2009 agreed to sell its nutrition business, including its subsidiary Carol Info Services , to global healthcare major Abbott Laboratories, but the Rs 625-crore deal had to be aborted after a group of investors holding 40% of Wockhardt's foreign currency convertible bonds opposed the sale in the high court.

In January 2011, Wockhardt once again looked for suitors and pharmaceutical majors like Pfizer as well as Abbott and Danone lined up to enter into negations with Wockhardt. Although the Mumbai-based company is believed to have received offers ranging from Rs1,365 to Rs1,455 crore, Wockhardt was rumoured to be seeking around Rs1,500 crore. Wockhardt has a significant presence in India's paediatric nutritional category. The unit has two manufacturing facilities at Lalru and Jagraon in Punjab.

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