AGP Ltd plans mega merger to enter Pakistan's top 10 pharma firms

Pakistan's AGP Limited has unveiled a sweeping corporate reorganization that will absorb three subsidiaries and an associated company into a single entity.

The move, disclosed to the Pakistan Stock Exchange on May 22, would more than double AGP's revenue base and push it into the country's top 10 pharmaceutical companies.

AGP expects the merger to lift it from 15th to among Pakistan's top 10 pharmaceutical companies.

What is AGP Limited's merger plan?

AGP Limited plans to merge three subsidiaries, OBS AGP, OBS Pakistan, and OBS Pharma, along with parent company Aitkenstuart, into a single entity.

The consolidation would lift AGP's revenue by about PKR 8.7 billion to PKR 37.5 billion. It would move AGP from 15th to among Pakistan's top 10 pharmaceutical firms.

AGP disclosed the plan in a material information notice to the PSX on May 22. The scheme requires approval from shareholders, creditors, and the High Court of Sindh. If sanctioned, it will be effective from January 1, 2026, or another date set by the court.

The merger is expected to diversify AGP into gynecology, consumer healthcare, and dermatology. It would strengthen the company's specialized manufacturing capabilities.

What does the AGP merger involve?

As per the proposed arrangement, OBS AGP, a 65%-owned subsidiary holding the Sandoz portfolio, will merge into AGP. Its minority shareholders get 22,015,000 new AGP shares at 6.29 AGP shares per OBS AGP share.

OBS Pakistan, a 91.82%-owned subsidiary holding the Viatris portfolio, will also merge into AGP. It will see 2,736,000 new shares issued at 0.76 AGP shares per OBS Pakistan share.

OBS Pharma, which holds the Bayer portfolio, will be demerged and its operations merged into AGP. Its shareholders receive 91,394,854 new AGP shares at 4,805.45 AGP shares per OBS Pharma share.

Aitkenstuart, AGP's parent company, will be partly demerged and merged into AGP. This results in an adjustment of 7,474,677 AGP shares otherwise allotted to it under the other transactions.

What does each AGP subsidiary do?

AGP began commercial operations in 1989 as an independent pharmaceutical manufacturer in Karachi. It grew through licensing arrangements with international companies to become one of Pakistan's largest pharma firms.

In 2021, AGP acquired 22 pharmaceutical brands with over 50 stock-keeping units from Sandoz AG. These brands, held through OBS AGP, include Azomax, Zatofen, and Amoxi-Clav.

Through OBS Pakistan, AGP acquired brands from US firm Viatris Inc. The portfolio covers anti-depressants, anti-hypertensives, and ophthalmology products.

Key Viatris brands include Zoloft, Cardura, Lyrica, Lipitor, and Norvasc. Norvasc alone recorded a turnover of PKR 1.3 billion in the 12 months before acquisition.

OBS Pharma holds the Bayer portfolio, focused on women's healthcare and dermatology. The acquisition included a Lahore manufacturing facility and 12 brands for about $25 million.

Prominent Bayer brands include Ciproxin, Gravibinan, Travocort, and Primolut N.

How will the merger affect AGP's revenue and profit?

The combined topline is projected to rise by about PKR 8.7 billion to PKR 37.5 billion while profit after tax would increase by about PKR 1.9 billion to over PKR 5.6 billion.

AGP's consolidated revenue for 2025 stood at PKR 28.9 billion, up 15% year-on-year.

OBS AGP and OBS Pakistan together accounted for 42% of AGP's total revenues. The arrangement is expected to be accretive to existing AGP shareholders by about 10.5%.

How will the merger expand AGP's manufacturing?

The merger grows AGP's manufacturing facilities from three to four. The addition is the Bayer facility, a dedicated hormonal and psychotropic plant spanning over three acres in Lahore.

The facility is located at the Quaid-e-Azam Industrial Estate. The deal also adds brands such as Travogen, Skinoren, Noctamid, Testoviron, and Utrogestan to AGP's portfolio.