Sun Pharma to buy Ranbaxy in a $4 bn deal; smart move, says Dr Reddy's G V Prasad

14th April 2014

In what is being described by a landmark deal in Indian pharma, Sun Pharma and Ranbaxy on Monday morning announced that Sun Pharma is to acquire Ranbaxy in an all stock $4 billion deal.

According to a release from Sun Pharma, it is to create world’s 5th largest specialty generic pharma company, the number one pharma company in the US and in India. Within India, get a leadership position in 13 specialty segments and Daiichi Sankyo to become the second largest shareholder in Sun Pharma.  The two companies have entered into definitive agreements pursuant to which Sun Pharma will acquire 100 per cent of Ranbaxy in an all-stock transaction.  Under these agreements, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy. This exchange ratio represents an implied value of Rs Rs 457 for each Ranbaxy share, a premium of 18 per cent to Ranbaxy’s 30-day volume-weighted average share price and a premium of 24.3 per cent to Ranbaxy 60-day volume-weighted average share price, in each case, as of the close of business on April 4, 2014.

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