NCLT Sanctions Cohance Lifesciences-Suven Pharmaceuticals Amalgamation Scheme Under Sections 230-232, Companies Act, 2013 - 2025-06-08

NCLT Approves Cohance Lifesciences and Suven Pharmaceuticals Amalgamation

Mumbai, India – The National Company Law Tribunal (NCLT), Mumbai Bench, has granted sanction to the Scheme of Amalgamation between Cohance Lifesciences Limited (Transferor Company) and Suven Pharmaceuticals Limited (Transferee Company) and their respective shareholders. The order, pronounced on March 27, 2025, clears the path for the merger, which aims to create a leading diversified end-to-end Contract Development and Manufacturing Organisation (CDMO) player in India.

The joint company petition was filed under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Bench, comprising Smt. Lakshmi Gurung (Member Judicial) and Sh. Hariharan Neelakanta Iyer (Member Technical), reviewed the proposed scheme after hearing arguments from the Petitioner Companies' Counsel and the Regional Director's representative.

Scheme Details and Rationale

Cohance Lifesciences is primarily involved in contract development and manufacturing of intermediates for pharmaceuticals and specialty chemicals, as well as clinical research. Suven Pharmaceuticals focuses on contract development and manufacturing of solid oral dosage formulations and pharmaceutical products.

According to submissions made by the Petitioner Companies' Counsel, the amalgamation is expected to deliver significant benefits, including:

* Scale: Creating a larger, diversified CDMO entity.

* Customer Relationships: Leveraging complementary customer bases and deepening innovator relationships. * Niche Capabilities: Enhancing access to capabilities like antibody drug conjugates.

* Facility Access: Increasing sales potential through access to US FDA-audited GMP facilities.

* Synergy Benefits: Accelerating growth and improving margins.

The Scheme proposes an exchange ratio whereby equity shareholders of Cohance Lifesciences will receive 11 fully paid-up equity shares of Suven Pharmaceuticals (face value INR 1 each) for every 295 fully paid-up equity shares held in Cohance Lifesciences (face value INR 10 each). The appointed date for the Scheme is the Effective Date.

Regulatory and Shareholder Approvals

The Tribunal noted that the Scheme had received overwhelming approval from the equity shareholders of both companies in meetings held on November 28, 2024. For Cohance Lifesciences, 99.967% of voting shareholders approved the Scheme, while for Suven Pharmaceuticals, 99.9994% of voting shareholders were in favour. Meetings of secured and unsecured creditors were dispensed with by the Tribunal's order dated October 22, 2024.

Notices of the Scheme were served upon various statutory authorities, including the Regional Director, Registrar of Companies, Income Tax Authorities, GST Authorities, SEBI, Stock Exchanges (BSE and NSE), Official Liquidator, and the Department of Pharmaceuticals.

Both the Bombay Stock Exchange and the National Stock Exchange had previously conveyed "no adverse observations" or "no-objection" to the Scheme via letters dated July 19, 2024, and July 23, 2024, respectively.

Addressing Regulatory Observations

The Tribunal carefully considered the reports filed by the Regional Director, the Official Liquidator, and observations from the GST Authority.

The Regional Director raised points regarding open charges of the Transferor Company (Cohance), payment of stamp duty and fees on increased authorized capital, protection of creditor interests, compliance with accounting standards, service of notices, and the appointed/effective date. The Petitioner Companies provided undertakings and clarifications, confirming compliance with legal requirements, the transfer of charges to the Transferee entity, payment of applicable duties/fees, protection of creditor interests (backed by significant net worth), and compliance with accounting standards and MCA circulars. The Regional Director stated that the explanations were satisfactory and had no objections to the Scheme's approval.

The Official Liquidator's report noted details of the Transferor Company and its summary of findings, including pending litigations and assets not registered in the Transferor's name (held by entities that previously merged into Cohance). The companies clarified that pending litigations would continue against the Transferee Company and that the transfer of assets was in progress. The Official Liquidator's observations were also addressed to the satisfaction of the Tribunal.

Observations from the GST Authority highlighted existing GST demands and pending appeals against Suven Pharmaceuticals for previous financial years. Suven clarified that the Scheme would have no implication on these matters, and the pending proceedings would continue against the Transferee Company.

Tribunal's Decision

Finding the Scheme to be "fair and reasonable," "not in violation of any provisions of law," and "not contrary to public policy," the Tribunal emphasized the importance of the commercial wisdom of the shareholders and creditors, citing the Supreme Court's decision in Miheer H. Mafatlal vs. Mafatlal Industries Ltd .

The Tribunal held that with the approvals from members, satisfactory responses to regulatory observations, and undertakings provided by the companies, there were no impediments to granting sanction.

The sanction order includes specific directions, mandating the dissolution of Cohance Lifesciences without winding up, clarification that the sanction does not grant exemption from statutory payments (stamp duty, taxes), permits regulatory authorities (including Income Tax and GST) to take action if needed, and confirms that all pending proceedings by or against Cohance will be continued by or against Suven. The employees of the Transferor Company will become employees of the Transferee Company on no less favourable terms.

The Petitioner Companies are directed to file certified copies of the order and the Scheme with the Registrar of Companies and other concerned Statutory Authorities within the stipulated timeframes.

The order thus sanctions the amalgamation, allowing the two pharmaceutical entities to combine their operations.