The board of Mumbai-based JB Chemicals and Pharmaceuticals Ltd has approved the sale of its over the counter business in Russia and CIS countries to Cilag GmbH International, a wholly owned subsidiary of Johnson & Johnson. The consideration for this transaction is Rs 938 crore.

Including the sale of trademarks, registration, brands etc, the total consideration of the deal is about Rs 1,155 crore, and the deal is expected to be completed in two months, a company official told Business Line . At present the OTC business clocks revenues of an estimated Rs 382 crore, he said.

In a late evening meeting, the board also approved the sale of worldwide rights and registrations of three OTC brands (Doktor Mom, Rinza and Fitovit) to Cilag, for an additional consideration of Rs 6 crore. JB Chem will continue to produce the products for Cilag for another five years, the official said.

The Russia/CIS OTC business is being sold as a going concern on a slump sale basis including OTC trademarks, brands, patents, registrations and domain names. The sale will also involve the transfer of the employees (about 220 people) of the Russia/CIS OTC business.

Cilag's affiliate, Johnson & Johnson LLC, has also entered into a contract with the company's wholly owned subsidiary situated in Russia for purchase of its OTC inventory and receivables for a consideration of $47 million (Rs 211 crore).

Mr J.B. Mody, Chairman, “The divestment will provide JBCPL with the financial flexibility to pursue new growth opportunities in India and other focus markets.”

The transaction is conditional upon customary closing conditions including JBCPL's shareholders' approval. Bank of America Merrill Lynch is the exclusive financial advisor to JBCPL, a note from the company said. Though the announcement was after market hours, JB Chemical shares had closed down about 8 per cent at Rs 145 on the BSE.

>jyothi@thehindu.co.in

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