Shantha deal tax travails? Sanofi eyes help

Sanofi faces a possible tax demand from India over its Rs 3,000-cr Shantha acquisition.

Written by Agencies | Published: April 13, 2012 8:49:15 pm

Faced with a possible tax demand from Indian authorities over its Rs 3,000-crore acquisition of majority stake in Hyderabad-based Shantha Biotechnics in 2009,drug maker Sanofi Pasteur today said it is seeking the help of French authorities to resolve the issue.

The transaction that took place between the sellers and Sanofi Pasteur in 2009 for the acquisition of the French company ShanH was subject to a taxation in France,under the French law,the company said in a statement.

“The parties have therefore jointly contacted the French tax authorities,in accordance with the tax treaty that exists between France and India,to request their involvement to help resolve the situation that would potentially imply a double taxation for the transaction,” it said.

The company,however,did not specify whether it had received a tax notice from Indian authorities.

“It is too early for us to make any further comment as to how these discussions are progressing,” it said.

In the Budget for 2012-13,Finance Minister Pranab Mukherjee had proposed amendment of income tax laws with retrospective effect to cover cross border deals involving Indian assets,like UK-based mobile operator Vodafone’s purchase of Hong Kong-based Hutchison’s telecom business,which included operations in India,in 2007 for about USD 11.2 billion.

Sanofi Pasteur,the vaccine division of Sanofi-aventis,had in July 2009,acquired 80 per cent stake in Shantha Biotechnics for about Rs 3,000 crore,valuing the Hyderabad- based firm at 550 million euros.

It had acquired ShanH,which held majority stake in Shantha Biotechnics — a privately held maker of vaccines against Hepatitis B,Diphteria and Tetanus,among others.

ShanH,the French subsidiary of Merieux Alliance,had bought majority stake in Shantha Biotechnics in November 2008.

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