Economy, Business And Markets

Indian Drugmaker’s Dutch Arm to Set Up Joint Venture in Iran

Indian Drugmaker’s Dutch Arm  to Set Up Joint Venture in IranIndian Drugmaker’s Dutch Arm  to Set Up Joint Venture in Iran

Indian multinational pharmaceutical and biotechnology company Cipla says its subsidiary in the Netherlands will pump in €16.8 million to form a joint venture with its Iranian distributor, Ahran Tejarat Company.

The joint venture proposes to undertake manufacturing and marketing of pharmaceutical products in Iran.

“Cipla Holding BV, a wholly-owned subsidiary of Cipla in the Netherlands, has entered into a joint venture agreement with Ahran Tejarat Company. As per the agreement, Cipla Netherlands will hold a 75% stake in a joint venture company in Iran, while the JV partner shall hold the remaining 25% stake,” Cipla said in a Bombay Stock Exchange filing.

“The total expected investment of Cipla Netherlands in cash in the joint venture company is estimated at up to a maximum of €16.8 million.”

Cipla Netherlands will initially acquire a 75% stake in Issat Company from the JV partner for €1.35 million payable in cash and the balance of up to €15.5 million is expected to be infused by Cipla Netherlands into Issat Company as equity over the next one year.

As part of the transaction, Cipla said, Issat Company, incorporated in 1998 in Iran and currently owned by the JV partner, is proposed to be used as the joint venture company.

“Issat Company has a valid pharmaceutical manufacturing license in Iran and also owns certain fixed asset, but has not undertaken any business activity since incorporation and as a result, does not currently have any turnover,” it added.

The acquisition is expected to be completed by March 2017, subject to completion of precedent conditions and regulatory approvals.

Earlier in October 2014, Cipla had signed an agreement with the company for setting up a manufacturing unit in Iran.

“The earlier agreement executed by the company with the JV partner has been terminated,” Cipla said.

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