Sun Pharma to acquire Ranbaxy in $4 billion deal

Sun Pharmaceutical Industries Ltd is to acquire 100 per cent of Ranbaxy Laboratories Ltd in an all-stock transaction, the companies announced on Monday.Their combination would create India’s largest pharmaceutical company and the world’s fifth-largest speciality and generics drugs company, according to a statement from Ranbaxy.The combined entity’s revenues are estimated at $4.2 billion.Ranbaxy shareholders will receive 0.8 shares in Sun Pharma for each Ranbaxy share.

Japan’s pharmaceutical Daiichi Sankyo Co, which has a majority stake in Ranbaxy, would become a significant shareholder of Sun Pharma after the transaction.Daiichi would also have the right to nominate one director to Sun Pharma’s board of directors.Ranbaxy, one of India’s largest drugs majors, has faced a string of problems recently with US drugs authorities.In January, the US Food and Drug Administration banned imports from a Ranbaxy unit in India due to quality control violations.In May 2013, an US subsidiary had to pay the drugs administrator $500 million in penalties for sale of below-quality drugs.