Boston, MA 06/11/2014 (wallstreetpr) – In an attempt of Pfizer Inc. (NYSE:PFE) to merge with the Indian arm via its subsidiary Wyeth Inc, it is expected that the company might not get the approval from the Foreign Investment Promotion Board (FIPB). Wyeth Inc was acquired by Pfizer five years ago. The Department of Industrial Policy & Promotion in India has not agreed to give a green signal to the proposal of merger, until and unless Pfizer gets a go-ahead from the Bombay High Court, India.
Take of the Department of Industrial Policy & Promotion (DIPP)
The Department of Industrial Policy & Promotion said that according to the FDI policy in India, FIPB will approve the merger only after authorisation from a designated High Court of India. In this case, DIPP said, Pfizer Inc. (NYSE:PFE) has not yet got the approval from Bombay High Court.
Various proposals to be undertaken by FIPB in India
On June 11, 2014, FIPB will take up as many as 32 proposals and decide on them. FIPB in India is chaired by Secretary of Department of Economic Affairs and also has the Secretaries from various other Ministries as well as Departments such as Industry, Home and Commerce. Apart from the Pfizer’s proposal of merger, FIPB will also take up the proposals from AT&T, Bulgari International Corporation, BNP Paribas and World Disney. It is expected that AT&T’s proposal for increasing the equity from 74% to 100% will get a green signal. Apart from AT&T, the proposal of World Disney for investing 1100 crore INR in its Indian venture will also most likely get a nod.
What happens if Pfizer’s proposal gets rejected?
In case the proposal of Pfizer is rejected by FIPB, it will have to approach the body once again after getting clearance from the Bombay High Court. Pfizer Inc. (NYSE:PFE) had acquired Wyeth in the year 2009 in a deal worth $68-billion. This was a part of the global merger, which was completed wholly except only in a few countries which also included India.
