India's IDL to sell stake in Astra IDL

India's IDL Industries has accepted an offer from AstraZeneca to buyits 25.75% holding in Astra IDL for a consideration of 670 rupees ($14.33) per share, reports India Infoline. This reverses a tentative agreement reached in 1998 whereby Astra AB of Sweden (which merged with the UK's Zeneca to form AstraZeneca last year) would divest its 25.75% share in Astra IDL, to give IDL Industries a 51.5% holding in the company.

However, subsequent to the Anglo-Swedish merger, it was made clear that AstraZeneca was not willing to transfer any new technology to Astra IDL, nor encourage exports by this company unless it had a majority holding. India Infoline points out that this would have curbed the future growth prospects of Astra IDL and, in view of this, the IDL board decided to accept the offer to divest its stake in the Indian drug company. It has since said it will focus on developing and expanding its core business, which is industrial explosives and detonators, or diversify into chemical-related areas.