Amarchand & Mangaldas has advised Mumbai-based pharmaceutical company Piramal Healthcare in a share buyback worth US$560m. The transaction is a tax-effective means of distributing dividends to its shareholders in India after a number of significant asset sales. “The Piramal Healthcare buyback is the largest buyback in the history of corporate India,” Amarchand & Mangaldas managing partner and lead partner of the deal Cyril Shroff said.The transaction will see a 20% buyback of equity shares listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).

The board of Piramal Healthcare approved the proposed buyback on 22 October 2010.  Subject to shareholder approval, the buyback is expected to close no later than 31 Mar 2011.

Earlier this year, Piramal Healthcare sold its local formulations business to US-based Abbott Healthcare for US$3.8bn – the second biggest takeover in India’s health-care industry. The gong for biggest pharmaceutical takeover in India still goes to the Daiichi-Ranbaxy deal in 2008.

The takeover deal included an up-front payment of US$2.12 bn to Piramal from Abbott and an additional US$400m to be paid annually for the next four years.  Luthra & Luthra’s Delhi corporate and tax practice represented Abbott with senior partner Mohit Saraf leading the team, and Baker & McKenzie represented Abbott as international counsel.

Crawford Bayley advised Piramal on domestic legal issues and UK-based Stephenson Harwood advised Piramal as international counsel, led by corporate M&A partner Andrew Edge.

Stephenson Harwood had previously advised on several Piramal deals including its acquisition of US anesthetics producer Minrad, and acquisition of blood plasma products from PlasmaSelect AG.ALB

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