Illustration: 29mokara /
7 April 2014Asia

Sun Pharma to acquire rival Ranbaxy for $3.2bn

Mumbai-based Sun Pharmaceutical Industries is buying Indian rival Ranbaxy Laboratories in a merger worth $3.2 billion, the companies have confirmed.

The transaction will strengthen Sun Pharma’s product portfolios in dermatology, urology and anti-infectives.

According to a presentation given by the companies today, April 7, the transaction will create the fifth largest specialty generic pharmaceutical company in the world, and the largest in India, with 184 Abbreviated New Drug Applications (ANDAs) in its pipeline.

The new combined company’s revenues are estimated at $4.2 billion on a pro forma basis, with yearly earnings of $1.2 billion, in 2013.

It will operate in 65 countries and have 47 manufacturing plants in five continents.

Japanese pharmaceutical company Daiichi Sankyo, which holds about 63.4 percent of Ranbaxy’s outstanding shares, will become Sun Pharma’s second-largest shareholder.

News of the merger comes just months after Ranbaxy was hit by another import ban from the US due to concerns about one of its Indian manufacturing plants.

Sun Pharma’s managing director Dilip Shanghvi said about the merger: “In high-growth emerging markets, [Ranbaxy] provides a strong platform which is highly complementary to Sun Pharma’s strengths.

“We see tremendous growth opportunities and are excited with the prospects to create lasting value for both our shareholders through a successful combination of our franchises.”

Arun Sawhney, managing director and chief executive of Ranbaxy, said: “We believe this transaction brings significant value to all Ranbaxy shareholders. Sun Pharma has a proven track record of creating significant long-term shareholder value and successfully integrating acquisitions into its growing portfolio of assets.

“We are confident that Sun Pharma is the ideal partner to help us realise our full potential and are excited to participate in future value creation opportunities,” he added.

The transaction is still subject to approval by Sun Pharma and Ranbaxy shareholders, and the Indian government. It is expected to close by the end of this year.

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