The Vijay Mallya-controlled United Breweries group is in an advanced stage of negotiation to sell the ailing UB Pharmaceuticals.
The company is in talks with La Nova Chem, a Mumbai-based bulk drug manufacturer, which in turn is tying up with Italian pharma group Pharma Chem for the proposed acquisition.
Confirming the development, senior UB group sources told Business Standard, "We are at the last leg of divestment of our pharmaceuticals business. The deal includes the sale of UB Pharmaceuticals along with all its manufacturing units."
Considering the accumulated losses of around Rs 20 crore (Rs 200 million), the deal is expected to be struck at about Rs 10-15 crore (Rs 100-150 million), they added.
The company's manufacturing unit, which has been shut down following losses, is located near Bangalore. The deal is expected to be finalised within 4-5 weeks.
Ajay Dharmashi, chairman and managing director of La Nova Chem, said, "The deal is yet to be inked. Hence it is too early to comment on the issue."
The UB group, having identified its pharmaceuticals business as non-core, had put it up for sale for quite sometime now.
Currently, UB's pharmaceutical operations consist of its fully owned subsidiary UB Pharmaceuticals and UB Pharma Kenya.
La Nova Chem's own manufacturing facility is situated 120 kms from Mumbai. While the closely-held company's sales turnover could not be ascertained, it is primarily an export oriented pharmaceutical ingredients company with presence in over 15 countries.
Its product portfolio comprises of human as well as veterinary pharmaceutical products.
As a part of the group's restructuring exercise, the UB group has consolidated is businesses to focus only on core businesses of beer and liquor.
As a part of a major re-organisation of its subsidiaries, the company has increased its stake in a number of its subsidiaries to make them 100 per cent subsidiaries.
These include UB Global Corporation, UB Transit systems, United Breweries (Holdings), UB Infrastructure Projects, UB Holdings (South Africa) Proprietary, UB Pharmaceuticals and Variegate Trading.