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.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.
The company still has a net debt of $1.2 billion.
Siddharth Mittal and Shreehas Tambe will continue in their roles as CEO and managing director at Biocon Ltd and Biocon Biologics Ltd, respectively, until completion of the integration process.
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.### Biocon Integrates Biocon Biologics in $5.5 Billion Value-Accretive Deal, Dropping IPO Plans
On December 6, 2025, Biocon Ltd., India's leading biopharmaceutical company, announced the full integration of its biosimilars arm, Biocon Biologics Ltd., as a wholly owned subsidiary. The transaction values Biocon Biologics at $5.5 billion and involves acquiring minority stakes through a combination of share swaps and cash payouts. This move consolidates Biocon's biosimilars and generics operations under one roof, streamlining governance and unlocking synergies in a competitive global market.
#### Background on Biocon Biologics
Biocon Biologics specializes in developing affordable biosimilars—biologically similar versions of high-priced biologic drugs—for treating conditions like cancer, diabetes, and autoimmune diseases. Established as a subsidiary in 2021, it has grown rapidly through partnerships, including a joint venture with global pharma giant Viatris (formerly Mylan). The unit contributes significantly to Biocon's revenue, with a focus on emerging markets and expansions into the US and Europe.
#### Deal Structure and Parties Involved
Biocon is acquiring the remaining ~15% minority stakes held by external investors and partners. The transaction is structured as follows:
| Stakeholder | Stake Acquired | Consideration Details |
|------------------------------|----------------|---------------------------------------------------------------------------------------|
| **Serum Institute Life Sciences** | ~9.5% | Share swap: 70.28 Biocon shares for every 100 Biocon Biologics shares, at ₹405.78 ($4.51) per Biocon share. |
| **Tata Capital Growth Fund II** | ~3.5% | Same share swap ratio as above. |
| **Activ Pine LLP** | ~2% | Same share swap ratio as above. |
| **Viatris Inc.** | Residual stake| $815 million total: $400 million cash + $415 million in Biocon shares (via swap). |
To fund the cash component, Biocon's board approved raising up to ₹45 billion ($500 million) through a Qualified Institutional Placement (QIP). The deal is expected to be completed by March 31, 2026, subject to regulatory approvals.
#### Strategic Rationale
After evaluating options like an initial public offering (IPO)—which Biocon had previously pursued but delayed due to integration challenges with Viatris and debt refinancing—the company opted for full integration. This "value-accretive" path eliminates the "holding company discount" that has historically suppressed Biocon's valuation by separating its core assets. The merger enhances operational efficiency, reduces administrative layers, and positions Biocon as a unified global biopharma leader. It also strengthens the balance sheet by improving the debt-to-EBITDA ratio (from 4.3x in 2020 to 2.5x currently) and freeing up resources for R&D and US market expansion, where biosimilars demand is surging.
#### Market Reaction and Analyst Views
Biocon's shares dipped 4.68% to ₹390.95 on the BSE in early trading post-announcement, reflecting investor caution over the capital raise and ownership dilution. However, analysts remain optimistic, viewing the deal as a long-term stabilizer that could boost profitability from FY27 onward through lower interest costs and enhanced transparency. "This integration crystallizes Biocon Biologics' valuation at a premium unlikely in an IPO amid market volatility," noted one expert, emphasizing its role in capturing full intrinsic value.
This landmark deal underscores Biocon's pivot toward consolidation in India's $50 billion biopharma sector, potentially setting a precedent for other holding structures. Investors will watch QIP execution and integration milestones closely.
