J&J in India

Johnson and Johnson has sold its largest facility in India, a plant that had been in operation since 2016 in Pengerla, Telengana. The Economic Times reported on Tuesday that Hetero, an Indian company, bought the plant. Johnson and Johnson and Hetero did not disclose the amount of the deal.

The Indian company plans to invest $75 million to convert the Pengerla facility into a pharmaceutical and biologics production facility.

According to the newspaper, Johnson and Johnson's plant in India has been idle for a long time due to financial difficulties caused by a drop in demand for its consumer products, including cosmetics and baby care products. The company was affected by the talcum powder scandal.

Beginning in 2014, Johnson and Johnson received lawsuits from consumers who claimed that long-term use of the company's talc-based products caused children to develop cancer. The lawsuits accused the company of concealing and downplaying health risks from its products, with disgruntled consumers demanding compensation.

As a result, Johnson and Johnson has decided to stop selling its talc-based baby powder on the global market as of next year.

Although J&J claims its products are asbestos-free, it will stop buying talcum powder as the chemical can be found around mines. Instead, the pharmaceutical giant will now sell baby food, which is based on cornstarch. Thousands of cancer patients who have sued Johnson Johnson are now seeking billions of dollars in compensation.

In addition to baby powder, Johnson Johnson has also been accused of fuelling the opioid crisis, which kills one million people in the US every year. It recently agreed to settle the matter by paying $26 billion.

It is worth noting that the transfer of a business by way of an urgent sale is done without specifying the value of individual assets and equipment, and the payment is made in a lump sum. This is usually done either to get rid of negative assets or to obtain tax or tax relief. Financial details of the urgent sale of the Telangana plant between Johnson Johnson and Hetero are not yet available, although payment in such cases is made in cash or by exchange of shares and bonds.