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Sun Pharma and Ranbaxy have got approval from the Competition Commission of India (CCI) for sale of seven brands to Emcure Pharma to comply with the fair trade watchdog’s conditional nod for their $4-billion merger.
In an order issued on Monday, the CCI approved the deal with Emcure, which would purchase the ‘divestment products’. In an earlier order, the CCI had asked the companies to sell these brands.
These seven brands were at the core of the CCI’s contention that the merger between Sun and Ranbaxy was ‘prima facie’ in violation of competition laws.
Despite the sale of these products, the merger would create India’s largest and the world’s fifth largest drug-maker.
The ‘conditional’ approval was given by CCI on December 5, 2014 after a public scrutiny of the deal. Consequently, the two companies were asked to identify a purchaser for the seven brands to be divested.
According to the CCI order, Sun and Ranbaxy last month proposed to the regulator that Emcure Pharmaceuticals would purchase all seven products, following which the companies were asked to provide some further details and clarifications.
The CCI had also appointed PwC as a monitoring agency for the divestment process.
“The Commission considered the reports submitted by the Monitoring Agency and the Proposal along with all information submitted by the parties and Emcure, in order to assess whether Emcure meets the requirements laid down in the order and whether the APA (Asset Purchase Agreement) and the SA (Supply Agreement) proposed to be entered into by the Parties and Emcure, are in accordance with the provisions of the order,” the CCI said.
The regulator said it has found Emcure to be “a company active in the sales and marketing of pharmaceutical products in India and has the financial resources, proven expertise, manufacturing capability or ability to outsource manufacturing and incentive to maintain and develop the divestment products, as a viable and active competitor to the parties in the relevant market”.
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