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Group Members:Abhishek Kokate

Pranali Parkar
Ajoy
Louis

Introduction
Ranbaxy Laboratories Limited is an Indian multinational

pharmaceutical company that was incorporated in India in 1961.


The company went public in 1973 and Japanese pharmaceutical

company Daiichi Sankyo acquired a controlling share in 2008.


Daiichi Sankyo has Strong presence in the Japanese prescription

drugs market and Highly integrated supply chain network


In 2011, Ranbaxy Global Consumer Health Care received the OTC

Company of the year award. In the 2012, 2013 and 2014 Brand Trust
Reports, Ranbaxy was ranked 161st, 225th and 184th respectively
among India's most trusted brands.
As of 2013, Ranbaxy was exporting its products to 125 countries

with ground operations in 43 and manufacturing facilities in eight


countries.
Sun Pharma Established as partnership firm by Mr.Dilip Shanghavi

in 1983, listed since 1994 and headquartered in India, Sun Pharma is


an international, integrated, specialty pharmaceutical company.
Sun Pharma company has strong skills in product development,

process chemistry, and manufacturing of complex dosage forms and


APIs

Why Ranbaxy?
Ranbaxy has got a lot of ANDA's (Abbreviated New
Drug Application) approved for marketing in USA.
Their problem is to find an API plant because main
source of API was from Toansa. If Sun Pharma fills this
gap, Ranbaxy can begin its export to the USA. So, Sun
Pharma has got into this deal at the right time and
deal has an upside for all the shareholders.
Sun Pharmas managing director Dilip Shanghvi has
acquired a reputation for acquiring companies in
trouble at a good price, and then turning around their
operations

Why Daiichi sold


Ranbaxy?

Daiichi faced criticism after Ranbaxys plants


came
under
the
US
Food
and
Drug
Administrations (FDAs)
Ranbaxys inability to overcome its FDA-related
problems has put pressure on its promoters.
With Sun Pharma acquiring Ranbaxy, Daiichi is
relieved of the burden of managing Ranbaxys
problems. It will hold a 9% stake in Sun Pharma, a
s a result of its current stake in Ranbaxy and have
the right to nominate one director to Sun
Pharmas Board of Directors.

Acquisition by Daiichi-Sankyo
In June 2008, Daiichi-Sankyo acquired a 34.8%
stake in Ranbaxy for a value $2.4 billion.
In November 2008, Daiichi-Sankyo completed the
takeover of the company from the founding Singh
family in a deal worth $4.6 billion by acquiring a
63.92% stake in Ranbaxy.
Ranbaxy's Malvinder Singh remained as CEO after
the transaction.
The addition of Ranbaxy Laboratories extended
Daiichi-Sankyo's operations, with the combined
company worth about US$30 billion.
In 2009 it was reported that former Novartis Senior
Vice-President Yugal Sikri would lead the India
operations of Ranbaxy Laboratories.

Acquisition by Sun Pharmaceutical


On 7 April 2014 India based Sun Pharmaceutical and
Japan based Daiichi Sankyo jointly announced the sale of
the entire 63.4% share from Daiichi Sankyo to Sun
Pharmaceutical in a $4 billion all-share deal.
Under these agreements, shareholders of Ranbaxy, were
to receive a 0.8 share of Sun Pharmaceutical for each share
of Ranbaxy.
Post-merger, Ranbaxy promoter Daiichi Sankyo would
become the second-largest shareholder in Sun Pharma with
around 9 per cent stake and Shanghvi family will hold 54.7
per cent.
The combination of Sun Pharma and Ranbaxy created the
fifth-largest specialty generics company in the world and
the largest pharmaceutical company in India.

Structure Pre-Transction

Transction

Strcuture Post Transction

So why this deal seems fair to everyone?


First following the deal with Daiichi Sankyo in 2008 and
now with the Sun Pharmaacquisition. Daiichi Sankyo had
valued Ranbaxy at $8.5 billion and for a 63.92 per cent
stake paid Rs 19,804 crore or $4.6 billion with the price
for each share at Rs 737. At the time, the rupee was Rs
43 to a dollar. In the deal with Sun Pharma, the total
equity value of the transaction is $3.2 billion with each
Ranbaxy share priced at Rs 457. While the total equity
value is $3.2 billion, taking Ranbaxy's debt into account,
the transaction is worth over $4 billion.Now, under the
deal with Sun Pharma, Ranbaxy shareholders will receive
0.8 shares of Sun Pharma for each share of Ranbaxy and
the exchange ratio represents an implied value of Rs 457
for each Ranbaxy share and the transaction has a total
equity value of approximately $ 3.2 billion.

What happen with


employees?
According to the report by The Economic Times, 18
top executives of Ranbaxy, including Indrajit Banerjee,
President and CFO; YugalSikri, country head (India)
Ranbaxy; Maninder Singh, V-P marketing; GovindJaju,
global head, sourcing; RatulBahaduri, director-finance,
have been asked to leave.
The report also said nearly 150 senior management
staff including those who are VP and above will be
asked to leave over the coming months.
The executives have been given a severance
package and the freedom to exercise their stock
options before leaving.

Conclusion
It was a great deal overall and a win-win deal for
Sunpharma,the operational profit also increased after
the acquisition.
Target US$ 300 million in synergy benefits from the
Ranbaxy acquisition by FY18
Develop more products through expanded R&D team
for global markets.
Focus on developing complex products across
multiple dosage forms.