The drug firm, Cadila Healthcare Ltd recently structured a proposal according to which its subsidiary, Carnation Nutra Analogue Foods will allot four equity shares for every 15 equity shares held in Cadila Healthcare to Cadila shareholders.

The company has also decided to involve the merger of Zydus Hospital and Medical Research Pvt Ltd into Cadila in return for 100.9 million shares. Both the firms are Cadila’s majority shareholders.

The company said in a statement that, post the merger, Cadila would cancel Zydus Hospital’s 90 million shares which it currently hold in Cadila.

Cadila’s senior vice president, corporate finance Shirish Maniar said that once the merger is completed, Cadila’s stake in Carnation would rise to a little over 70 percent from the current 61.6 percent.

"It made strategic business sense to create synergies for similar businesses and strengthen long term business prospects for the groups’ consumer products business. We believe that there is a tremendous potential to grow this business and we would be better placed to unlock value through a concerted effort under a single banner”, Cadila Healthcare CMD Pankaj R Patel said.

Cadila, which markets wellness products, including Sugar Free and specialized skin care products under the brand name of ‘Everyuth’, posted sales of Rs 98 crore in 2007-2008.

Carnation which is well known for its product Nutralite margarine was acquired by Cadila Healthcare in 2006.  The company had a turnover of Rs 56 crore for the year ended March 31.

The process of restructuring which will also facilitate better alignment of assets with priorities to accelerate the consumer business, will be completed in early 2009.