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Sun Pharma, Ranbaxy merger cleared by Punjab & Haryana High Court

Posted by : Varun Doshi

On : 12 March 2015

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The Punjab and Haryana High Court gave its nod to the merger of two Indian pharmaceutical companies - Ranbaxy Laboratories Ltd and Sun Pharmaceutical Industries Ltd. 

The nod came on a petition filed by Mohali based company Ranbaxy through senior advocate Anand Chhibbar, less than a year after Sun Pharmaceuticals agreed to acquire Ranbaxy Laboratories.

Chibbar had submitted that the gross sales of the combined entity after the merger would be around Rs. 27,000 crore and it would have a diverse, highly complementary portfolio of speciality and generic products targeting a spectrum of chronic and acute treatments.

In August last year, the Punjab and Haryana High Court had on a petition filed by Ranbaxy convened a meeting of the company's shareholders in Mohali to get their vote on amalgamation. On September 29, 2014, the High Court allowed the petition, since 99 per cent of the shareholders had approved the scheme.

Once the deal closes, Sun will become the world’s fifth largest generic drug maker.

On January 31, the US Federal Trade Commission cleared the merger, following the Competition Commission of India’s (CCI) conditional nod. CCI has asked both companies to divest seven drug assets in India as a pre-requisite. The process, it is learnt, is under way, with PricewaterhouseCoopers India (PwC India) as the consultant.

CCI had asked Sun Pharma to divest all products containing tamsulosin & tolterodine. Ranbaxy was asked to divest the brands Terlibax, Rosuvas EZ, Raciper L, Terlibax, Triolvance and Olanex F.

The all-share deal, largest in the Asia-Pacific region’s pharmaceutical sector, announced last year, is seen as a rare purchase of a local rival by a leading Indian company. The buyout is valued at $3.2 billion. As Sun Pharma will also take Ranbaxy’s debt of about $800 million on its books, the overall transaction value comes to $4 billion.

In 2008, Japan’s Daiichi Sankyo had acquired a 63.9 per cent stake in Ranbaxy for $4.2 billion. The value of its investment has halved since, as Daiichi hasn’t been able to ensure compliance with norms at Ranbaxy’s factories supplying drugs to the US.


Also see: 

Sun Pharma, Ranbaxy deal likely to approved by February end

Sun Pharma to emerge as largest Indian pharma company with take over of Ranbaxy from Daiichi