Fortis and ITC Merger Agreement: What You Need to Know
Fortis Healthcare Limited, one of India’s leading healthcare providers, and ITC Limited, one of the country`s largest conglomerates, have recently announced a merger. The two companies signed a definitive agreement on 13th May 2021 for the acquisition of ITC’s entire shareholding in Technico Agri Sciences Limited (TASL) by Fortis Hospitals Limited (FHL), a subsidiary of Fortis Healthcare Limited.
The Merger Agreement: Terms and Conditions
As per the agreement, FHL will acquire 100% of the share capital of TASL, which has a manufacturing facility in Solan, Himachal Pradesh, for a cash consideration of INR 10.5 crores. TASL is a subsidiary of Technico Agri Sciences Limited, which is a wholly-owned subsidiary of ITC Limited.
The merger will also involve the transfer of TASL’s business undertaking, assets, and liabilities to FHL. The transaction is expected to be completed by the end of May 2021, subject to the satisfaction of customary conditions.
The Impact of Merger on Fortis Healthcare Limited
The merger is expected to enhance FHL’s range of healthcare offerings and enable it to expand its presence in the fast-growing healthcare sector in India. The acquisition of TASL’s manufacturing facility will enable FHL to manufacture and market its products, including pharmaceuticals and other healthcare products.
Speaking on the occasion, Ashutosh Raghuvanshi, the Managing Director and CEO of Fortis Healthcare Limited, said, “This acquisition is a step towards augmenting FHL’s product portfolio, strengthening our brand, and broadening our presence in the Indian pharmaceutical sector.”
The Impact of Merger on ITC Limited
The merger will enable ITC Limited to focus on its core businesses, which include FMCG, hotels, paperboards, paper, and packaging. The divestment of TASL is aligned with ITC’s strategy of focusing on its core businesses and increasing shareholder value.
In Conclusion
The Fortis and ITC merger is a significant development for both companies, as it will enable them to strengthen their core businesses and expand their presence in the healthcare and FMCG sectors, respectively. With this acquisition, Fortis Healthcare Limited is poised to enhance its product offerings and expand its reach in the Indian pharmaceutical sector. The merger is expected to be a win-win for both companies and their stakeholders.