The Hindu Business Line : Weekly News Round-up

In one of the biggest deals in the Indian pharmaceutical sector, Japan's third-largest pharmaceutical company Daiichi Sankyo will buy up to 51 per cent stake in Ranbaxy Laboratories at Rs 737 a share.

The value of the deal is expected to be between $3.4 billion and $4.6 billion, taking Ranbaxy's enterprise value to $8.5 billion.

Under this, Daiichi Sankyo will acquire the entire 34.8 per cent stake held by the promoter, Mr Malvinder Singh and family, 9.5 per cent through preferential allotment of equity shares and another 4.5 per cent through share warrants to be issued on a preferential basis.

The company will also make an open offer to the public shareholders for acquiring another 20 per cent.

As part of its on-going effort to contain rising inflation, the RBI marked up the repo rate to 8 per cent, hiking its short-term lending rate by 25 basis points with immediate effect.

The repo rate is the rate at which RBI lends money to banks under its liquidity adjustment facility.

Essar Steel has increased its offer to acquire West Virginia-based Esmark Steel by about 12 per cent to 19 dollars a share to out-bid rival suitor Russia's Severstal steel, which had earlier matched the Indian steel company's offer.

Essar Steel edged closer towards acquisition of West Virginia-based Esmark, as the US steel maker rejected the 17 dollar a share offer by Severstal.

Close on the heels of its recent acquisition in Spain, Cadila Healthcare Ltd last Monday announced acquisition of a 70 per cent stake in Simayla Pharmaceuticals of South Africa, through its wholly owned subsidiary Zydus Healthcare SA Pty Ltd, for an undisclosed amount.

As per the agreement reached between the two companies, the remaining stake will be held by the promoter of the company, Mr Ben Classen, who will continue to head the company's operations.

The Indian crude basket last Monday touched a new high for the current fiscal at 132.69 dollars a barrel, up 5.73 dollars from 126.96 dollars, reflecting the surge in global crude prices.

Inflation surged to an over seven-year high on soaring manufactured product and primary article prices.

The annual Wholesale Price Index-based inflation rose 8.75 per cent for the week ending May 31, up from 8.24 per cent in the preceding week, according to latest Government data. Inflation was measured at 5.09 per cent during the corresponding week of last year.

Riding on the high level of mineral production, the Index of Industrial Production recovered to 7 per cent in April 2008 as compared to a low of 3.9 per cent in the preceding month. However, it is still substantially lower compared to the 11.3 per cent registered in April 2007.

Mining output increased by 8.6 per cent during the month as against 2.6 per cent in April 2007. But the growth rate in the manufacturing sector was lower at 7.5 per cent compared with 12.4 per cent in the same month last year.

In its continuing inflation-busting efforts, the Centre has raised the export duty on long steel products used in construction and infrastructure projects from 10 to 15 per cent, along with a flat 15 per cent ad valorem duty on all iron ore shipments.

Grasim Industries said last Tuesday that it would sell its sponge iron business Vikram Ispat, to Welspun Power and Steel Ltd, for Rs 1,030 crore.

The company said it will hive off Vikram Ispat by way of 'slump sale' to the Gujarat-based company.

Compiled by M.J. Madhavan
Podcast byS. Vasudevan and S. Narayanamurthi