Comments
The $4-billion merger of Ranbaxy Laboratories Ltd with Sun Pharmaceutical Industries Ltd has got clearance from the two leading stock exchanges — BSE and NSE.
The ‘no-objection’ from the two exchanges would allow the two companies to file their scheme of amalgamation with the High Court for further clearance of the deal and marks one of the numerous regulatory approvals that Sun Pharma and Ranbaxy need to consummate for the transaction.
The deal had separately come under scanner of the markets regulator SEBI for alleged insider trading violations and the present ‘no-objection’ from the exchanges.
The combination of Sun Pharma and Ranbaxy creates the fifth-largest speciality generics company in the world and the largest pharmaceutical company in India.
The two firms now need clearances of the High Court and the Competition Commission of India (CCI), among others.
In separate communications to Sun Pharma and Ranbaxy, NSE and BSE said that they are granting their ‘no-objection approval’ to the proposed scheme and this observation letter would be valid for six months, within which period the companies would have to file the scheme with the High Court for further clearance.
The exchanges have noted the confirmation given by the company stating that the scheme does not violate or over-ride or circumscribe the provisions of various regulatory norms.
“Accordingly, we do hereby convey our ‘no-objection’ with limited reference to those matters having a bearing on listing/delisting/continuous listing requirements within the provisions of the Listing Agreement, so as to enable the company to file the scheme with the High Court,” the exchanges said in a similar-worded circular.
According to norms, companies seeking to execute merger or de-merger strategies need to obtain a ‘no-objection certificate’ from stock exchanges.
Sun Pharma, in April, had announced its plan to acquire rival Ranbaxy from its Japanese parent, Daiichi Sankyo, in an all-stock deal valued at $3.2 billion. Besides, the deal also involves a debt component of $800 million.
The transaction valued Ranbaxy at 2.2 times its $1.8-billion revenue for 2013, or about Rs 457 per share.
The combined entity will have operations in 65 countries, 47 manufacturing facilities across five continents, and a significant platform of speciality and generic products marketed globally.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.