SUN PHARMA'S RANBAXY ACQUISITION: THE WINNERS AND LOSERS

India's Sun Pharma acquired Gurgaon-based drug maker Ranbaxy Laboratories, owned by Japan's Diiachi Sankyo, for $4 billion in a deal to create world's fifth largest specialty generic Pharma Company through an all-stock merger in which five shares of Ranbaxy will fetch four shares of Sun Pharma. 

Sun-Ranbaxy combined will become largest Indian Pharma Company. The Sun Pharma- Ranbaxy deal is the biggest in Pharma sector in Asia-Pacific.

WHO BENEFITS AND HOW?

Daiichi is the parent company of Ranbaxy since it bought the Indian drug maker from its earlier promoters. With Sun Pharma acquiring Ranbaxy, Daiichi is relieved of the burden of managing Ranbaxy’s problems. It will hold 9% stake in the combined entity.

ENHANCED GLOBAL MARKET PRESENCE

The combined entity will have 47 manufacturing facilities across 5 continents. It will have an established presence in key high growth emerging markets. In India, it will be ranked No. 1 by prescriptions amongst 13 specialty segments.

FINANCIALLY COMPELLING TRANSACTION

Sun Pharma expects to realize revenue and operating synergies of US$ 250 million by third year of acquisition and implement remedial measures to tackle the regulatory issues with the US Food and Drug Administration.

TRANSACTION DETAILS

Under the agreements, Ranbaxy shareholders will receive 0.8 shares of Sun Pharma for each share of Ranbaxy. The expected revenue of the combined entity is $4.2 billion.