India's Sun Pharma to Acquire Ranbaxy in $4 Billion Transaction
Bloomberg News
Sun Pharmaceutical Industries Ltd. (SUNP) agreed to buy Ranbaxy Laboratories Ltd. (RBXY) in a $4 billion stock transaction to expand its presence in the U.S. and in emerging markets.
Ranbaxy investors will get 0.8 share in Sun for every one of their shares, the two companies said today in a statement. Daiichi Sankyo Co., which owns 63.5 percent of Gurgaon, India-based Ranbaxy, said it planned to vote in favor of the deal. Daiichi Sankyo jumped the most since June in Tokyo trading.
Buying Ranbaxy will help Sun, India's largest drugmaker by market value, expand in the U.S., India and emerging markets, according to the statement. Since Daiichi Sankyo bought a controlling stake in Ranbaxy in 2008, four of its Indian plants have been banned from exporting to the U.S. for failing to meet standards, and in March the Food and Drug Administration said the company was recalling some batches of its generic cholesterol-lowering medicine.
The transaction will help Daiichi Sankyo's earnings, Takashi Akahane, a health-care analyst at Tokai Tokyo Research Center Co. in Tokyo, said by telephone. 'Daiichi Sankyo seems to have backed off from directly getting involved with business in India and left it to a local company.'
Daiichi Sankyo surged as much as 5.1 percent, the biggest intraday gain in more than nine months, to 1,844 yen in Tokyo trading today. The stock traded at 1,832 yen, up by 4.4 percent, at 10:26 a.m. local time.
Ranbaxy recently received a subpoena from the U.S. Attorney for the District of New Jersey requesting certain documents relating to issues previously raised by the FDA on its Toansa facility in north India, Sun Pharma said in the statement. The FDA in January said Ranbaxy can no longer make or distribute drug ingredients from that plant to the U.S.
Ranbaxy shares rose 8.2 percent to 459.55 rupees in Mumbai trading on April 4. That took its gain for last week to 26 percent, the largest weekly advance since August.
To contact the reporters on this story: David Welch in New York at dwelch12@bloomberg.net; Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net
To contact the editors responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net Lena Lee, Frank Longid
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