The Hindu Business Line : Daiichi Sankyo deal among 24 FDI proposals cleared

New Delhi, Aug 4 Japanese drug maker Daiichi Sankyo’s plan to acquire shareholding in Ranbaxy through equity and warrants, was among the 24 FDI proposals cleared by the Government on Monday.

An official release issued here said that Daiichi Sankyo’s proposal to purchase and subscribe to the equity shares of the two Indian companies and issue of warrants has been approved.

When contacted, a senior Government official said that the proposal pertained to acquisition of shareholding in Ranbaxy and Ranbaxy-controlled Zenotech.

“The proposal attracts Press Note 1 as Daiichi Sankyo has two ventures in India – a wholly-owned subsidiary and Unisankyo,” the official said, adding that the proposal involves an FDI inflow of Rs 104.63 crore.

SEBI approval

In June, Daiichi Sankyo announced that it would buy out 34.8 per cent stake held by the Singh family in Ranbaxy for close to Rs 10,000 crore, and make an open offer for acquiring an additional 20-per cent stake in the Indian drug major. Incidentally, SEBI has given its clearance to the open offer today.

The proposals were cleared by Finance Minister, Mr P. Chidambaram, based on the recommendation of the Foreign Investment Promotion Board (FIPB), and together amount to Rs 753.11 crore FDI. Other proposals that were cleared today include that of Black & Decker Overseas Holdings involving setting up a company in India to carry out the business of manufacturing (FDI of Rs 26 crore); and another proposal by Tokai Rika Co Ltd to set up a joint venture company to manufacture, sell and export automotive parts (Rs 35 crore), the release said.

Chemicals sector

In the chemicals and petrochemicals sector, the Government has given a go-ahead to the Rs 35.04-crore proposal of C.R. Seals India (now SKF Technologies India) entailing issue of partly paid-up equity shares to foreign collaborators.

As many as 11 proposals were deferred including that of Pepsico India “to increase the approved equity from $405 million to $455 million”, and that of Quippo Telecom Infrastructure “to increase foreign equity from 65.63 per cent to 82.55 per cent in telecom sector”.

Two proposals – ICP Investments (Mauritius) and Meta Telecom — have been rejected by the Government.