India’s one of the largest Pharma companies, Sun Pharmaceutical Ltd has decided to acquire the troubled pharma company Ranbaxy Laboratories Ltd in a $ 3.2 bn all-share deal.
In a recent business event on Monday, Major Drug producing Co. Sun Pharmaceutical Industries has decided that it will buy Daiichi Sankyo-claimed Ranbaxy Laboratories in an all stock transaction totalling value worth of USD 3.2 billion.
Considering Ranbaxy’s debt, the transaction is worth over USD 4 billion. The arrangement between the two organizations, both rapped by the USFDA over quality issues, will make world’s fifth-biggest generic drug maker company.
For Sun Pharma, the relatively rare purchase by a leading Indian company of a local rival creates the biggest generic drug business by sales in India, with combined revenue estimated at $4.2 billion. Under terms of the agreed deal, Ranbaxy shareholders will get 0.8 of a Sun Pharma share for each Ranbaxy share they own.
On the deal of Sun Pharma and Ranbaxy Laboratories, Managing Director of Sun Pharma, Mr. Dilip Shanghvi said, “Ranbaxy has a significant presence in the Indian pharma market and in the US where it offers a broad portfolio of ANDAs and first-to-file opportunities. In high-growth emerging markets, it provides a strong platform which is highly complementary to Sun Pharma’s strengths.
Under the terms of the assertions, Sun Pharma will acquire 100% stake of Ranbaxy in an all-stock deal under which Ranbaxy shareholders will receive 0.8 share of Sun Pharma for every share they hold in Ranbaxy. Daiichi Sankyo, the owner of Ranbaxy Laboratories, India’s top drug maker by sales, will hold a stake of something like 9 percent in Sun Pharmaceutical after the deal. After the merger, Daiichi Sankyo will become the second largest shareholder in Sun Pharma.
India’s pharmaceutical industry, which supplies more than 20 per cent of the world’s generic drugs, according to PricewaterhouseCoopers, suffers from a lack of oversight including a severe shortage of regulatory inspectors.
The deal values Ranbaxy shares at 457 rupees apiece, representing an 18 pct premium to their 30-day volume-weighted average share price. Ranbaxy shares rose by nearly a quarter over the previous three sessions to close at 459.55 rupees on Friday.
The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of specialty and generic products marketed globally, including 629 ANDAs.
Apart from India and the US, Sun Pharma has manufacturing facilities in Israel, Mexico, Hungary, Canada, Bangladesh and Brazil. In India, the firm has 10 manufacturing facilities spread across Gujarat, Jammu and Kashmir, Sikkim, Tamil Nadu, Maharashtra and Dadra and Nagar Haveli. Sun has eight plants in the US.