MUMBAI, January 28: French multinational Rhone Poulenc's successful buyout of the minority shareholding in Rhone Poulenc Rorer will see the consolidation of the group's pharmaceutical operations under a single life sciences entity globally.The move would mean that Rhone Poulenc Rorer's 51 per cent holding in Rhone Poulenc Rorer India and 40 per cent stake in Rhone Poulenc India would now be indirectly held by Rhone Poulenc, France. The restructuring exercise will also see the French parent's 51.5 per cent stake in Rhone Poulenc Chemicals India transferred to a separate entity, Rhodia. Rhodia, operational globally on January 1, 1998, combines the French giant's chemicals, fibres and polymers businesses and is the second largest specialty chemicals company globally. Rhone Poulenc France had, last year, launched a cash tender offer of about Rs 15,000 crore ($97 per share) to buy out the 31.7 per cent outstanding shares in Rhone Poulenc Rorer globally.
Rhone Poulenc chief representative in India, Nigel Tofttold The Financial Express that Rhone Poulenc Rorer (which is now 100 per cent held by Rhone Poulenc France) would, however, continue to hold a 40 per cent stake in Rhone Poulenc India.
Asked whether the French multinational planned to increase its 40 per cent stake in Rhone Poulenc India to 51 per cent, he said, "This remains an option." However, Toft added that both Rhone Poulenc India and Rhone Poulenc Rorer India would remain as separate companies.
Rhone Poulenc Rorer in India is held 51 per cent by Rhone-Poulenc Rorer, France while 49 per cent equity is held by Rhone Poulenc India. Rhone Poulenc India is again held 40 per cent by Rhone Poulenc Rorer (now 100 per cent held by Rhone Poulenc, France) while the rest is held by the public, institutions etc. Though both Indian arms share a range of services in the pharmaceuticals business, Rhone Poulenc India is essentially a prescription drugs company while Rhone Poulenc Rorer is mainly into institutional sales.
Toft said that all clearances for thetransfer of equity in Rhone Poulenc Chemicals India to Rhodia were being sought. The French giant believes the formation of Rhodia would enhance its technological, industrial and commercial synergies. Rhodia would continue to focus on the growing specialty chemicals and value-added services businesses, which are seen as less sensitive to economic cycles.
The Rhone Poulenc group in India registered total sales of $109 million of which $23 million was from exports in 1996. The group is represented by six companies and has 1,675 employees in India.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
