Suven Pharmaceuticals Limited shares climbed over 13% today after its Board announced a scheme of amalgamation merger with Cohance Lifesciences Limited on February 29.
The merger of Suven Life Sciences and Cohance, a contract development and manufacturing organisation (CDMO) and merchant Active Pharmaceutical Ingredient (API) platform, is expected to establish Suven as a diversified CDMO and API leader in India. The merged entity will have an expanded capacity of around 2,650 kilolitres (kL), the capacity of the reactor, and a broadened customer base, resulting in substantial scale and synergy benefits.
The transaction is expected to take 12-15 months to conclude, subject to shareholder and regulatory approvals, as per a release by the company. The merger will result in the establishment of Suven as one of the leading integrated CDMO players in India.
Shareholders of Cohance will receive 11 shares of Suven for every 295 shares of Cohance based on the swap ratio upon the scheme becoming effective. The new shares of Suven will trade on NSE and BSE.
After the merger, the company will own 66.7%, and public shareholders will hold 33.3% of the combined entity (pre-ESOP dilution). Cohance has unique capabilities in the form of its antibody-drug conjugates (ADC) platform and global leadership in selecting low- to mid-volume molecules.
At 3:07 pm, the shares of Suven Pharma were trading at Rs 683.25, 8.56% higher than the previous close.
