Aurobindo Pharma rallies after calling off proposed deal to buy 51% stake in Cronus Pharma

• Follow

Shares of Aurobindo Pharma advanced over 4% in Monday’s early trade after the company said its Rs 420-crore deal to acquire a 51% stake in Cronus Pharma Specialities India (Cronus) has been cancelled. The scrip traded 3.65% higher at Rs 706.30 at around 9.40 am (IST). On the other hand, the benchmark BSE Sensex was up 0.64% at 55,678 at around the same time.

Earlier this month, the company had announced that it had entered into definitive agreements to subscribe to fresh equity shares in Hyderabad-based Cronus, a generic veterinary pharmaceutical products firm engaged in development, manufacturing and sale of these items.

The company had entered into binding agreements with Cronus for acquisition of 51% ownership by subscribing to 95,059,963 equity shares of Rs 10 each at a premium of Rs 34.18 per equity share aggregating to Rs 420 crore.

In a regulatory filing on Friday, Aurobindo Pharma said, “The board of directors in its meeting held today has approved the termination of the aforesaid agreements, and the parties have mutually agreed and terminated the said agreements.” It, however, did not disclose the reasons for the termination of the proposed deal.

At the time of the announcement of the deal, Aurobindo Pharma had said the acquisition would provide it a foothold in the $48 billion global animal health market. Cronus has 67 products in its pipeline, of which 22 have been filed and six have been approved by the Centre for Veterinary Medicine, USFDA.

In another update, the company on August 12 posted a 1.68% fall in its consolidated net profit to Rs 769.97 crore for the quarter ended on June 30, 2021, mainly on account of a reduction in expenses. The company had posted a net profit of Rs 783.16 crore in the same quarter last year. Consolidated total revenue from operations of the company stood at Rs 5,701.98 crore for the quarter under consideration. It was Rs 5,924.78 crore for the same period a year ag.