The Mumbai bench of the National Company Law Tribunal (NCLT) has approved Casper Pharma’s merger with listed drug maker, Suven Pharmaceuticals.
In April 2022, Suven Pharmaceuticals acquired Casper Pharma (CPPL) for about Rs 155 crore. CPPL had an installed capacity of 120 crore tablets and capsules at the time of the acquisition by Suven Pharmaceuticals.
The scheme of amalgamation (merger) is expected to create greater efficiency due to the consolidation of operations, pooling and more effective utilisation of the companies’ combined resources, reduction in overheads, costs and expenses, economies of scale, elimination of duplication of work and rationalization and reduction of compliance requirements.
“From the material on record, the scheme appears to be fair and reasonable and does not violate any provisions of law and is not contrary to public policy,” observed the division bench of Justice VG Bisht and a technical member Prabhat Kumar in its order, while allowing the scheme of amalgamation in its order of October 24.
Before the tribunal’s order, Meghna Rajadhyaksha of law firm Shardul Amarchand Mangaldas & Co, appeared for the companies and informed the tribunal that the proposed amalgamation of the transferor company (Casper Pharma) with the transferee company (Suven Pharmaceuticals) will create concentrated management focus and integration with uniform management procedures and seamless implementation of policy changes.
Ankita Singh, managing partner of Sarvaank Associates, said that the approval of the amalgamation scheme between Casper Pharma and Suven Pharmaceuticals is a significant milestone in creating a more efficient corporate structure.
“By integrating Casper’s assets and expertise, Suven aims to optimize costs and tap into new revenue streams, thereby strengthening its competitive position in the pharmaceutical industry,” adds Singh. “As part of the amalgamation scheme, Suven Pharma has the option to exercise approximately 6.59 million employee stock options from Casper, which will help keep key talent engaged and invested in the company’s future,” she added.
The companies, through their counsel, also argued that the amalgamation will create a streamlined group structure which will assist in more efficient utilisation of capital.
Uday Ved, partner at global tax practice group KNAV said, the tribunal while approving the scheme also states that the income tax department will be at liberty to examine the aspect of any tax payable as a result of the scheme
“Assuming the scheme satisfies conditions of Section 2(1B), Section 47(vi) and Section 47(vii) of the Income Tax Act, there should be no capital gains tax payable on the transfer of assets by transferor company (Casper Pharma) to transferee company (Suven Pharma) and transfer of shares by shareholders of transferor company (Casper Pharma),” adds Ved.
In a separate development, on February 29, privately held company Cohance Lifescience also decided to merge with Suven Pharmaceuticals to create the first private equity-led listed contract manufacturing company.
Source: Economic Times