Sun Pharmaceutical Industries Ltd on 7 April 2014 announced to acquire troubled Ranbaxy Laboratories Ltd. Sun Pharma will acquire 100 percent of Ranbaxy in an all stock deal for 3.2 billion dollars.
The deal between Sun Pharma and Ranbaxy has been agreed at a swap ratio of 1:0.8. That is, Ranbaxy shareholders will receive share of 0.8 share of Sun Pharma for each share of Ranbaxy.
After the deal, Daiichi Sankyo Co Ltd, which holds 63.4 percent in the Ranbaxy, will hold a stake of about 9 percent in Sun Pharmaceutical. The Japanese Daiichi Sankyo invested in Ranbaxy for the first time in 2008.
The deal values Ranbaxy shares at 457 rupees apiece, representing an 18 percent premium to their 30-day volume-weighted average share price. For the 60-day volume-weighted average share price of Ranbaxy, the premium comes about 24.3 percent.
As a result of this agreement between the two Indian pharmaceutical giants, the combined entity will become the fifth largest producer of generic drug in the world and the largest pharmaceutical company in India.
The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents.
The combined entity’s revenues are estimated at 4.2 billion dollars with Earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.2 billion dollars for the twelve month period ended 31 December 2013.
About Sun Pharma
Sun Pharma was established in 1983 at Vapi in Gujarat. It is headquartered in Mumbai in India. Sun Pharma is an international, integrated, specialty pharmaceutical company which manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in India, US and across the world.
Recently in March 2014, US Food and Drug Administration had banned the import of drugs from Karkhadi plant of Sun Pharma in Gujarat on grounds of quality.
The Chairman of the Sun Pharma is Mr. Israel Makov who is the former President and CEO of Teva Pharmaceutical Industries Ltd.
Mr. Dilip S. Shanghvi is the founder-cum-Managing Director of Sun Pharmaceutical Industries Ltd.
Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. In 1952, Bhai Mohan Singh bought the company from his cousins Ranbir and Gurbax.
It was incorporated in 1961 with its head office in Borivalli, Mumbai, India and it went public in 1973.
Over the last few years Ranbaxy Pharmaceuticals has been under the radar of USFDA on account of quality issues.
USFDA very recently in January 2014, banned the imports of drugs from Toansa plant in Punjab which was fourth plant of Ranbaxy after Mohali, Paonta Sahib amd Dewas plants.
When: 7 April 2014