Vijay Mallya's United Breweries group is exiting its holding in Aventis Pharma Ltd by selling 10.27% stake in the company. The stake will be acquired by Hoechst GmbH, a 100% subsidiary of France's largest drugmaker Sanofi-aventis SA. The deal will be done at Rs 1,750 per share and the UB Group is expected to net Rs 414.11 crore from
this sale.
Various entities controlled by the UB Group are expected to sell the stake on or after March 30, 2010, as per a disclosure made by Aventis to the exchanges. The share in Aventis are held by Kingfisher Finvest India Ltd, United Breweries Holdings Ltd, McDowell Holdings Ltd and
Mallya Private Ltd.
The deal will help Hoechst consolidate its holding in Aventis from present 50.10% to 60.37% in the firm and become the sole promoters. The shares are being acquired at a discount to Aventis' trading price of 1,827.25, which was up by 3.53% today.
Aventis reported revenues of Rs 1,052 crore and a net profit of Rs 157 crore for calendar year 2009. The company was set up in India in 1956 by Hoechst and co-promoted by the UB Group. Hoechst, a German company that became Aventis after its merger with Rhône-Poulenc S.A. in 1999, and was later absorbed by Sanofi-Aventis.
It's not clear where what the UB Group plans to do with these funds from the stake sale. The funds could be used by Kingfisher Airlines, a UB Group company, to cut its debt of $1.2 billion (Rs 5,640 crore) as on September 2009.