The $4 billion merger deal of Ranbaxy with Sun Pharma is expected to close by the end of 2014, Japanese drug maker Daiichi Sankyo, which holds majority stake in the former, said today.
Daiichi had acquired a majority stake in Ranbaxy Laboratories in 2008 for around Rs 22,000 crore.
Earlier this week, Sun Pharma had announced to acquire Ranbaxy Laboratories in an all stock transaction with a total equity value of $3.2 billion, along with debt of $800 million taking the overall deal value to $4 billion.
“The merger is expected to close by the end of December 2014, pending shareholder, court and regulatory approvals and other customary conditions,” Daiichi Sankyo said in a statement.
Daiichi Sankyo is currently in the process of determining the impact of this transaction on earnings, it added.
According to the company’s estimates the merger deal would get approval from Indian securities exchanges by June end.
Further, the company expects the extraordinary meetings of shareholders at Sun Pharma and Ranbaxy at the end of August, followed by the completion of merger “with approval from high courts in India and other regulatory agencies“.
Daiichi said it will have the right to nominate one director to Sun Pharma’s board post completion of merger.
“This merger will enable the merged entity to make the significant step of becoming the fifth—largest specialty generics company in the world and the largest pharmaceutical company in India,” the company said.
The merger is an opportunity to pursue new development in its hybrid business model through the new partnership with Sun Pharma, it added.
“Ranbaxy will be merged with Sun Pharma by means of a share swap. A merger in which Sun Pharma is the surviving company and Ranbaxy is the company to be absorbed,” Daiichi said.
Currently, Daiichi owns around 63.41 per cent of the shares of Ranbaxy. The company is scheduled to acquire about 9 per cent stake in Sun Pharma as a result of the merger.