Strides will receive approximately $30 million
Strides Shasun and Mylan have agreed to settle regulatory and general claims on Agila transaction. Strides had completed the sale of its Agila Specialties division to Mylan for a total consideration of up to $1.75 billion in December 2013.
“Strides and Mylan have now agreed on a full and final settlement of all regulatory claims notified by Mylan to the company and the subsidiary…pursuant to this full and final settlement, Mylan’s regulatory concerns will be satisfied from the regulatory escrow,” Strides Shasun said in a BSE filing.
It further said: “Strides will receive approximately $30 million, representing the balance of funds it deposited in the regulatory escrow on consummation of the Agila sale.”
Strides Shasun also said that both the companies “have now agreed on a full and final settlement of the warranty and indemnity claims”.
As part of the transaction for sale of Agila, Strides Shasun had deposited $100 million in an escrow in respect of potential claims on warranties and indemnities and has also deposited a further $100 million into an escrow in respect to potential claims under the SPAs in relation to certain regulatory concerns.
In December last year, Strides had said it is evaluating claims made by Mylan over compliance with the US FDA manufacturing norms.
The company had received notification of claims from Mylan in relation to certain provisions contained in the SPAs (sale and purchase agreements) and in relation to certain regulatory concerns.
In August last year, the US FDA had issued a warning letter to Mylan Laboratories for violation of current good manufacturing practice (CGMP) norms at its three plants in Karnataka.
The US regulator said its inspectors found “significant violations” in the three manufacturing facilities in Bengaluru of the company, which is an arm of US-based Mylan Inc.
Of the three units, two plants belonged to Agila Specialties, which Mylan had acquired from Strides Arcolab in 2013-end. The other unit is owned by Mylan Laboratories.