New Delhi, June 11 (UNI) Pharmaceutical major Ranbaxy Laboratories Ltd today announced that Japanese drug maker Daiichi Sankyo Company Ltd will acquire majority stake in the company, including the entire share of promoter Singh family, for 4.6 billion dollars.
Under the binding Share Purchase and Share Subscription Agreement signed between the two companies, Daiichi Sankyo will purchase 34.8 per cent of the Singh family, and make an open offer for a further 20 per cent share of Ranbaxy, the country's largest pharmaceutical firm, as per Indian regulations, at a price of Rs 737 per share which represents a 31.4 per cent premium to its closing share price of yesterday.
This is the biggest deal in the pharma sector in the country and the second-largest foreign acquisition of an Indian company after the Hutch-Vodafone deal.
''The strategic alliance with Daiichi Sankyo, a leading research-based pharmaceutical company will put us on a new and much stronger platform to harness our capabilities in drug development, manufacturing and global reach,'' Ranbaxy CEO-cum-MD Malvinder Mohan Singh told reporters here.
The total transaction value is expected to fetch between 3.4 billion dollars to 4.6 billion dollars, he said, adding that the deal values the company's market capitalisation at 8.5 billion dollars.
The agreement allows Daiichi Sankyo to buy at least 50.1 per cent of Ranbaxy's voting rights through March 2009, Mr Singh added.
Commenting on the development, Daiichi Sankyo Company Ltd president and Chief Executive Officer Takashi Shoda said, ''the proposed transaction is in line with our goal to be a global pharma innovator and provides the opportunity to complement our strong presence in innovation with a new, strong presence in the fast growing business on non-proprietary pharmaceuticals.'' After the acquisition, Daiichi Sankyo's global reach will be more than doubled from the current 21 countries to 56, and make it around the 15th largest pharmaceutical company in the world, Mr Shoda said.
The deal with Ranbaxy, which is a major producer of generic drugs, allow the Japanese pharma major to expand its operation in generic drug production and sales to adapt to rapidly-changing market needs.
The deal will be financed through a mix of bank debt facilities and existing cash resources of Daiichi Sankyo and is expected to be completed by the end of March 2009.
Upon completion of the transaction, Ranbaxy will become a subsidiary of Daiichi Sankyo and Malvinder Mohan Singh will remain its Chief.
UNI SBA SG RN1930