Source: https://entrackr.com/2020/09/cci-approves-merger-of-medlife-with-pharmeasy/
The Competition Commission of India has approved the proposed merger of e-pharmacy companies Medlife and PharmEasy, the country’s fair-trade regulator said in a tweet. This comes a month after Medlife made a formal filing to merge with the Temasek-backed company.
However, the regulator is yet to make a disclosure on the structure of the merger. According to previous filings, API Holdings, the parent entity of PharmEasy, was set to acquire 100% equity shares of Medlife. In return, Medlife’s promoters were to get 19.95% stake in the merged entity.
The final arrangement of the merger is expected to be as per last month’s filing.
The deal will set a landmark for e-pharmacy companies in India when giants like Reliance and Amazon have also announced their entry in the space. While Amazon has started medicine delivery in select cities, Mukesh Ambani-led Reliance acquired a majority stake in Netmeds’ parent in a Rs 620 crore cash deal.
It was anticipated that the merger would face regulatory hurdles as the All India Organisation of Chemists and Druggists, which represents more than 850,000 members across India, had reportedly approached the regulator to disqualify the merger.
The body claims that online sales of medicines are not legal under Indian law. It had also sent a letter to Mukesh Ambani against the company’s acquisition of a majority stake in Netmeds.
According to sources close to the development, the deal will see a major valuation cut for Medlife. The Patna-based company was valued at $375 million as of January 31, 2020. But an ET report estimated the deal at around $235 million, which is based on the $1.2 billion enterprise valuation of the combined entity.
In its six years of operations, Medlife managed to raise several debt rounds from Prasid Uno Trust and its promoters.
