Biocon, the Bengaluru-based biopharmaceutical company, has announced that it will fully merge Biocon Biologics Ltd (BBL) into Biocon Ltd, making BBL a wholly owned subsidiary. Founder and executive chairperson Kiran Mazumdar-Shaw described the move as value-enhancing for investors and said the unified organisation will be better equipped to meet patients’ needs, particularly in diabetes care.
Explaining the rationale, she noted that markets had consistently undervalued both entities, partly due to BBL’s earlier debt load, which would have hindered a successful IPO. She highlighted that BBL’s debt-to-EBITDA ratio has fallen from 4.3 in 2020 to 2.5 now, and is expected to decline further, improving free cash flow and supporting stronger investments and product development. The combined company will also have a strong position in “diabesity,” alongside synergies in oncology, immunology, biosimilars, and generics.
As part of the transaction, Biocon will acquire remaining stakes held by Serum Institute Life Sciences, Tata Capital Growth Fund II and Activ Pine LLP through a share swap valuing BBL at $5.5 billion. It will also buy Viatris’ residual stake for $815 million through a mix of cash and shares. Leadership changes will follow, with Shreehas Tambe becoming CEO and MD of the merged entity and Kedar Upadhye taking over as CFO.