ACQUISITION

BY-MOHIT VERMA

SUN PHARMA-RANBAXY

The origin is from Latin acquīsītiōn-, from acquīrere to acquire

In case of a company, basically this act of acquiring includes several dimensions-1. Taking custody of records.2. Taking possession of an asset by purchase.3. Taking control of a firm by purchasing 51 percent (or more) of its voting shares.

What is Acquisition?

Sun Pharmaceutical Industries Limited

Sun Pharmaceuticals was established by Mr. Dilip Shanghvi in 1983 in Vapi with five products to analyse sickness.

It is an Indian multinational pharmaceutical company headquartered in Mumbai, Maharashtra. It manufactures and sells pharmaceutical formulations primarily in India and the United States.

Today it has total asset of US$23 billion It is the largest chronic prescription company in

India and a market leader in psychiatry, neurology, cardiology.

Ranbaxy Laboratories Limited

 Ranbaxy is an Indian multinational pharmaceutical company that was incorporated in India in 1961. In 1973 and Japanese pharmaceutical company Daiichi Sankyo acquired a controlling share in 2008.

By end of Dec 2010, the company's global sales were US$1,178 million, with overseas markets accounting for 75% of global sales

(USA: 28%, Europe: 17%, Brazil, Russia, and China: 29%). For the twelve months ending on 31 December 2006, the company's global sales were US$1,300 million.

The company met its sales targets for the latest financial year, it has been incurring a net loss and suffering a decline in net worth since 2011, which can be attributed to a few key circumstances..

These include the settlement amount of US$ 515 million paid to the US Department of Justice in May 2013 after civil and criminal charges were brought against it for misrepresentation of data and irregularities found in two of its facilities in India.

Behind the curtin

Diminution in the value of its investments and a loss on foreign currency option derivatives. Thus, the merger of the company with Sun Pharma comes at a crucial time when Ranbaxy is struggling to improve its financial position.

On 7 April 2014 Sun Pharmaceutical and Daiichi Sankyo jointly announced the sale of the entire 63.4% share from Daiichi Sankyo to Sun Pharma.

$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.

After this acquisition, the partner Daiichi-Sankyo was to hold a stake of 9% in Sun Pharmaceutical.  The combination of Sun Pharma and Ranbaxy created the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India.

Acquisition of Both

The new entity will be the world’s fifth largest specialty-generic Pharma company with sales of US$ 4.2 billion.

In the U.S., the merged entity will be No.1 in the generic dermatology market and No. 3 in the branded dermatology market.

The merger will also improve Sun Pharma’s global footprint in emerging Pharma markets like Russia, Romania, Brazil, Malaysia and South Africa, offering opportunities for better brand-building.

It enable Sun Pharma to enhance its edge in acute care, hospitals and OTC businesses with 31 brands among India’s top 300 brands and a better distribution network.

Outcomes & Synergy