With an anticipated completion date of March 31, 2026, the biopharma giant Biocon has merged Biocon Biologics Limited (BBL), a wholly-owned subsidiary, with Biocon Limited.
In order to store all biosimilar assets and eventually unlock value, Biocon Biologics was established in 2017 as a distinct subsidiary.
The worldwide biosimilars division of Viatris was purchased by Biocon Biologics in 2022 for $3.3 billion, financed by stock and around $1.2 billion in debt.
According to Mazumdar-Shaw, the acquisition’s debt has affected market perception and suppressed Biocon’s value, leading to a holding-company discount that does not accurately represent Biocon Biologics’ underlying strength.
Because of this, Biocon’s market capitalization does not adequately reflect BBL’s actual worth. She pointed out that in the present climate, pursuing an IPO would have devalued the company, which would not have been advantageous for shareholders.
Following a projected qualified institutional placement (QIP), the promoters’ interest will drop below 50% as part of the reorganization. Subject to shareholder approval, the board has authorized financing up to ₹4,500 crore (about $500 million) via the QIP, with the majority of the proceeds going toward the cash component due to Viatris.
Structure for sharing swaps
Through a share exchange of 70.28 Biocon shares for every 100 Biocon Biologics shares, valued at ₹405.78 per share, Biocon will purchase the remaining portion of BBL from Serum Institute Life Sciences, Tata Capital Growth Fund II, and Activ Pine LLP, valuing BBL at $5.5 billion.
Additionally, for $815 million—$400 million in cash and $415 million via a share exchange of 61.70 Biocon shares for every 100 Biocon Biologics shares—Biocon will purchase Mylan Inc.’s (Viatris) remaining shareholding.
Transition of leadership and governance
Biocon has established a Transition and Integration Management Committee under the direction of Shreehas Tambe, CEO & Managing Director, Biocon Biologics, and a Governance Council under Kiran Mazumdar-Shaw to supervise the process.
Until the merger is finished, Siddharth Mittal and Shreehas Tambe will remain in their existing positions. Following merging, Kedar Upadhye will become Chief Financial Officer and Tambe will become CEO and Managing Director of the merged company, pending clearance. Mittal is going to take on a leadership position in the Group.
