Biocon to merge biologics unit in $5.5 billion deal

Biocon Ltd will integrate Biocon Biologics Ltd as a wholly owned subsidiary in a deal valuing the unit at $5.5 billion, the company said on Saturday.
Biocon will acquire the remaining stake in Biocon Biologics from Serum Institute Life Sciences, Tata Capital Growth Fund II and Activ Pine LLP via a share swap of 70.28 Biocon shares for every 100 Biocon Biologics shares, at ₹405.78 per share.
It will also acquire the residual stake held by Mylan Inc. (Viatris) for a total consideration of $815 million, of which $400 million will be payable in cash and the rest through a share swap of 61.70 Biocon shares for every 100 Biocon Biologics shares, at ₹405.78 per share.
The integration of the unit is expected to be completed by 31 March 2026.
The company had constituted a strategy committee in May 2025 to evaluate a potential merger or public listing for the biologics arm.
“After careful consideration of key parameters such as strategic alignment, sectoral dynamics, shareholder value creation, and other relevant data, the Committee concluded that full integration of Biocon Biologics Limited with Biocon Limited offers the most efficient and value-accretive path forward,” the company said in a release.
Biocon's board has also approved raising additional capital, up to ₹4,500 crore through qualified institutional placement (QIP), subject to shareholder approval. The proceeds of the QIP will be largely utilised towards the cash component payable to Viatris.
Unlocking value
While Biocon had previously explored a public listing for the biologics unit as well, the merger unlocks higher value for the entity, executive chairperson Kiran Mazumdar Shaw told reporters in a press briefing.
“Market perceptions around acquisition-related leverage have continued to suppress Biocon Ltd's valuation, creating a holding company discount that does not reflect the underlying strength of performance of Biocon Biologics. And as a result, BBL's intrinsic value is not fully captured in Biocon td's market capitalization,” she said.
“In such a situation, pursuing an IPO would not have been beneficial for Biocon shareholders as the suppressed valuation would have failed to capture the true intrinsic worth of Biocon Biologics.”
Biocon Biologics acquired Viatris’ global biosimilars portfolio in 2022 for $3.3 billion. The company still has acquisition-related debt of about $1.2 billion.
With the merger, the firm will strengthen its balance sheet, with its consolidated debt-to-Ebitda ratio improving. The company’s debt-to-Ebitda ratio has improved from 4.3x in 2020 to 2.5x as of September 2025. Ebitda is ernings before interest, taxes, depreciation, and amortization.
“It will only decline further which makes us very robust and we will have free cash flow which will allow us to invest in a very confident and strong way to do much more in terms of bringing more products to the market,” said Mazumdar Shaw.
Last quarter, Biocon settled its structured debt obligations with Goldman Sachs and Kotak Mahindra Bank, as well as a commercial paper, after raising ₹4,500 crore through a QIP in June 2025.
Leadership transition
Following the integration, Biocon Biologics CEO and managing director Shreehas Tambe will take on the role of CEO and MD of the combined business, while Kedar Upadhye will become the combined entity’s chief financial officer.
Siddharth Mittal will continue his role as CEO and managing director at Biocon Ltd until the integration process is completed, following which he will transition “into a leadership role within the group,” the company said.
“To ensure a smooth transition and strong governance, we have constituted a governance council chaired by me and a transition and integration management committee led by Shreehas Tambe,” said Mazumdar Shaw.
Post the integration, Tambe will take on the role of CEO and managing director of the combined business, while Kedar Upadhye will become its chief financial officer. Siddharth Mittal will transition into a leadership role within the group, the company said.