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 valued at $5.5 billion, the company said on Saturday.
Biocon will acquire the remaining shares of Biocon Biologics from Serum Institute Life Sciences, Tata Capital Growth Fund II and Activ Pine LLP through a share swap of 70.28 Biocon shares for every 100 Biocon Biologics shares. ₹405.78 per share.
Additionally, it will acquire the remaining shares held by Mylan Inc. (Viatris) for a total of $815 million; of which $400 million will be paid in cash and the remainder through a share swap of 61.70 Biocon shares for every 100 Biocon Biologics shares. ₹405.78 per share.
Integration of the unit is expected to be completed by March 31, 2026.
The company had formed a strategy committee in May 2025 to consider a possible merger or IPO for its biologics arm.
“After careful consideration of key parameters such as strategic fit, sectoral dynamics, shareholder value creation and other relevant data, the Committee concluded that the full integration of Biocon Biologics Limited with Biocon Limited offers the most efficient and value-enhancing path forward,” the company said in a statement.
Biocon’s board of directors also approved additional capital increase. ₹4,500 crore through qualified institutional placement (QIP), subject to shareholders’ approval. The majority of QIP revenues will be used in the cash component to be paid to Viatris.
Unlock value
While Biocon had earlier explored a public listing for the biological unit, the merger would unlock higher value for the entity, chairman Kiran Mazumdar Shaw told reporters at a press briefing.
“Market perceptions around acquisition-related leverage continue to weigh on Biocon Ltd’s valuation, creating a holding company discount that does not reflect the underlying performance of Biocon Biologics. And as a result, BBL’s true value is not fully reflected in the market capitalization of Biocon td,” he said.
“In such a case, pursuing an IPO would not be beneficial to Biocon shareholders as the suppressed valuation would fail to capture the true intrinsic value of Biocon Biologics.”
Biocon Biologics acquired Viatris’ global biosimilar portfolio in 2022 for $3.3 billion. The company still has about $1.2 billion in debt related to the acquisition.
With the merger, the company will strengthen its balance sheet with the improvement of the consolidated debt-EBITDA ratio. The company’s debt to EBITDA ratio increased from 4.3 times in 2020 to 2.5 times as of September 2025. EBITDA is income before interest, taxes, depreciation and amortization.
“It will only fall further, which will make us very strong and we will have free cash flow, which will allow us to invest very confidently and strongly to do much more in terms of bringing more products to market,” Mazumdar Shaw said.
Last quarter, Biocon closed its structured debt obligations and commercial paper with Goldman Sachs and Kotak Mahindra Bank after raising them. ₹4,500 crore through QIP in June 2025.
leadership transition
Following the integration, Biocon Biologics CEO and managing director Shreehas Tambe will assume the role of CEO and MD of the combined entity, while Kedar Upadhye will be the chief financial officer of the combined entity.
Siddharth Mittal will continue as CEO and managing director at Biocon Ltd until the integration process is completed, after which he will transition to a “leadership role within the group”, the company said.
“To ensure a smooth transition and strong management, we have established a management council chaired by me and a transition and integration management committee led by Shreehas Tambe,” said Mazumdar Shaw.
Following the integration, Tambe will assume the role of CEO and managing director of the combined business, while Kedar Upadhye will become chief financial officer. The company said Siddharth Mittal will move into a leadership role within the group.
