Introduction : Players

Sun Pharma

Mr. Dilip Shanghvi founded Sun Pharmaceuticals in 1983 in Vapi , with a portfolio of 5
psychiatry products & marketing team of 2 people. Their tablet & capsules manufacturing
plant was set up at Vapi, Gujarat in 1983. In 1987, The company started selling its products
in India. Throughout 1990’s Sun pharma was acquiring stakes of other pharma industry
players such as TDPL , MJ Pharma, Caraco Pharmaceutical Laboratories to establish its
foothold in India as well as the world. In 1994, It launched its IPO. Today Sun Pharma is the
biggest drug firm in prescription for chronic sickness and the 5 th largest specialty generic
pharmaceutical company worldwide.

The 2014 Acquisition of Ranbaxy made Sun Pharma the 5th biggest firm in generics products
internationally.

The Company has spent extensively in building its research capability by establishing state-
of-art research & manufacturing facilities across the globe. It has indulged in MoU with
research & health sciences institute of Israel & Spain, International Centre for Genetic
Engineering & Biotechnology & National Institute of virology, India.

However, more than 70% of Company's sales originate from business sectors outside India.
The biggest market for Sun pharma is USA with brings approximately 60% of the company’s
incomes. Assembling tasks are in 26 areas including nations like US, Israel, Brazil & Canada.

In the US, the organization has strong foothold in generics & has recently launched the first
branded ophthalmic product, Bromsite in USA in 2016

Sun Pharma was oversubscribed 55 times when it went for IPO . It is one of the largest &
most profitable Indian drug firm.

Acquisitions and Joint Ventures

In 1996 Sun Pharma bought Kohli pharmaceuticals, a drug manufacturing giant. In 1998
Sun Pharma obtained various respiratory brands from Natco pharma. In 2010, the
organization gained a huge stake in Taro Pharma, Inc. American generic derma giant with
presence in Canada and Israel. In 2011, Sun Pharma went into a joint venture with MSD to
establish the generics markets in developing economies.
Ranbaxy
The organization was started by Ranbir Singh & Gurbax Singh as a distributor for a Japanese
organization in 1937. Incorporated in 1961, Ranbaxy Laboratories Limited, India's biggest
pharmaceutical organization, is a coordinated, research based, global pharmaceutical
organization, creating a wide scope of value, moderate generic drugs, trusted by doctors
and patients across topographies. Positioned 8th among the worldwide generic
pharmaceutical organizations, Ranbaxy today has a presence in 23 of the best 25
pharmaceutical markets of the world. The Company has a worldwide impression in 49
nations, world-class manufacturing plants in 11 nations and serves customers in 125+
nations.

In June 2008, Ranbaxy went into a union with one of the biggest Japanese pioneer
organizations, Daiichi Sankyo Company Ltd., to make a trend-setter and nonexclusive
pharmaceutical force to be reckoned with. The joined element presently positions among
the best 15 pharmaceutical organizations, all inclusive.

Ranbaxy has been associated with a few issues with FDA. In 2009 the US Food and Drug
Organization said it ended audits of all medication applications including information
created at Ranbaxy's Paonta Sahib plant in India in view of an act of misrepresented
information and test brings about endorsed and pending medication applications

Procurement

In June 2008, Daichi Sankyo acquired 34% stake in Ranbaxy for USD 2400 million. Although
even after Daichi Sankyo finished the takeover of the organization from the Singh
Family, Ranbaxy's Malvinder Singh stayed as CEO. Lipitor & Nexium became the highest
selling drugs in the world in 2008 which were produced by Ranbaxy.

Industry Background

World's third biggest medication maker by volume is the Indian Pharmaceutical industry.
Indian market produces 60% of global vaccines. This establishes more than 60% of global
drug supply to fulfill the World Health Organization's (WHO) demand for Diphtheria,
Tetanus and Pertussis (DPT) and Bacillus Calmette Guerin (BCG) vaccines and 90% of
measles vaccine globally.

The generic drug footprint of India is one the largest in the world with millions of global
customers & 250+ US Food and Drug Administration (FDA) and UK Medicine and Healthcare
approved plants. The global generic market is expected to reach an unprecedented USD
0.53 trillion by 2021 at a CAGR of 8.7% from 2016 to 2021
Sunpharma – Zenotech Deal
In 2005, Sun Pharma acquired Zenotech with 74.9% equity by buying 96+ lacs
shares of Zenotech in open offer, equivalent to additional 28.16% of equity of the
firm. Sunpharma paid ₹ 20.87 per share in other words an aggregate of ₹ 20.23
crore to achieve this 74.9% stake in Zenotech. Before this acquisition, The two
promoters of Zenotech , Sun Pharma held 46.85% stake & Daiichi Sankyo held
20% & remaining was held up by Zenotech.

Sunpharma – Ranbaxy Deal

In 2014, Sun Pharmaceutical obtained 100% of Ranbaxy Laboratories for $4 billion

to make world's fifth biggest firm of generics. Under these acquisition, Ranbaxy
will converge into Sun Pharma and the shareholders of Ranbaxy will get 0.8 shares
of Sun Pharma for each share of Ranbaxy. The trade proportion speaks to a
suggested estimation of Rs 457 for each Ranbaxy share, a premium of 18%.

Sun Pharma has put on hold some Ranbaxy brands which are of low synergy in its
domestic market. With the strength in speciality pharma Sun Pharma is expected
to leverage Ranbaxy’s strong global foothold in generics segment. The combined
entity’s manufacturing facilities cover 5 continents, with consumers across 150
countries. Sun Pharma estimates $250 million of synergies accruing from the
merger in 3 years. Sun Pharma acquired Ranbaxy from Japan’s Daiichi Sankyo for
$3.2 billion in stock & $800 million in debt. Sun Pharma has so far made around
20 acquisitions from 1983.

References :

https://www.deccanchronicle.com/140412/business-latest/article/sun-pharma-may-
acquire-zenotech-laboratories-limited

https://mnacritique.mergersindia.com/sun-pharma-acquires-ranbaxy/

https://www.businesstoday.in/moneytoday/stocks/ranbaxy-acquisition-good-for-sun-
pharma-shareholders-experts/story/205526.html

https://www.business-standard.com/article/companies/sun-pharma-draws-up-plan-to-fix-
ailing-ranbaxy-114091101300_1.html
https://www.business-standard.com/article/companies/sun-pharma-buys-ranbaxy-from-
japan-s-daiichi-114040700737_1.html