Sun Pharmaceutical Industries, the Indian drug maker, said on Sunday that it would pay about $4 billion in stock for Ranbaxy Laboratories, a smaller Indian rival.
The combined company will be the largest pharmaceutical company in India and the fifth-largest speciality generic drug maker in the world, with operations in 65 countries.
Annual revenues are estimated to surpass $4.2 billion
“We see tremendous growth opportunities and are excited with the prospects to create lasting value for both our shareholders through a successful combination of our franchises,†Dilip Shanghvi, managing director of Sun Pharma, said in a statement.
Ranbaxy shareholders will receive 0.8 shares of Sun Pharma for each of their Ranbaxy shares, representing an 18 percent premium over Ranbaxy’s 30-day volume weighted average share price. At Friday’s closing price, that values the deal at about 457.5 rupees per share, or $7.64.
The deal was unanimously approved by both companies’ boards and Ranbaxy’s controlling shareholder, Daiichi Sankyo, the Japanese drugmaker, which will become a big owner of Sun Pharma. Daiichi Sankyo acquired its stake in Ranbaxy in 2008.
Citigroup and Evercore Partners advised Sun Pharma, and Shearman & Sterling, Crawford Bayley and S. H. Bathiya & Associates, provided legal advice.
Ranbaxy received financial advice from ICICI Securities and legal legal advice from Luthra & Luthra Law and Amarchand & Mangaldas & Suresh A Shroff.
Daiichi Sankyo received financial advice from Goldman Sachs and legal advice from Davis Polk & Wardwell and Amarchand & Mangaldas & Suresh A Shroff.
