Matrix to merge with Strides Arcolab

The combined company, to be renamed Matrix Strides Ltd, would have a market capitalisation of about $850 million at current market prices, making it India’s seventh-largest drug maker by value.

‘‘There are synergies between the two companies — Matrix makes the raw materials and we make the finished formulation — so it makes sense to integrate operations, as you need to be present across the entire value chain,’’ Strides Chief Executive Arun Kumar said.

The two firms had combined sales of about Rs 1,200 crore in the year to March 2005, and both have been growing at about 35 per cent per annum.

Both boards approved the deal, which is subject to a valuation exercise and due diligence by both companies. The two boards expect to meet within six to eight weeks to finalise the terms of the merger plan.