Sun Pharmaceutical acquires Ranbaxy for $3.2 billion

MUMBAI/ GURGAON, INDIA: Sun Pharmaceutical Industries Ltd will buy Ranbaxy Laboratories Ltd in a $3.2 billion all-share deal. Ranbaxy, India’s biggest drugmaker by sales and 63.4 per cent owned by Japan’s Daiichi Sankyo Co Ltd, is banned from exporting drug ingredients to the US Sun Pharmaceutical’s Karkhadi plant (Gujarat, India), it is also barred from shipping products by the US Food and Drug Administration.

Under terms of the agreed deal, Ranbaxy shareholders will get 0.8 of a Sun Pharmaceutical share for each Ranbaxy share they own. Daiichi Sankyo said in a statement that it will hold a stake of about 9 per cent in Sun Pharmaceutical after the deal.

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. Daiichi has dispatched personnel and promised to provide the necessary support to resolve lingering quality problems at Ranbaxy, in which it first invested in 2008.

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