HYDERABAD: The $4 billion Sun-Ranbaxy deal on Monday inched a step closer with the Punjab & Haryana High Court giving its approval for the merger.
With this, all the approvals are in place for Dilip Shanghvi-led Sun to complete the merger process and catapult itself into the world’s fifth-largest generic drug maker.
It may be noted that the Competition Commission of India (CCI) had already given its conditional nod to the merger, asking both companies to divest seven drug assets in India. It is believed that process is already under way. Similarly, the US Federal Trade Commission, too, cleared the proposal in January.
“Ranbaxy Laboratories has informed BSE that the Punjab & Haryana High Court has orally pronounced the order on March 9, 2015, approving the Scheme of Arrangement involving the merger of Ranbaxy Laboratories Ltd with Sun Pharmaceutical Industries Ltd, under Sections 391 to 394, Sections 78 and 100 of the Companies Act, 1956, and Section 52 of the Companies Act, 2013,” Ranbaxy said in a disclosure with the bourses.
While giving its nod, the CCI had asked Sun Pharma to divest all products containing tamsulosin and tolterodine, currently marketed and supplied under the Tamlet brand, while Ranbaxy was asked to divest the brands Terlibax, Rosuvas EZ, Raciper L, Terlibax, Triolvance, Olanex F.
The all-share deal, considered as the largest in the Asia-Pacific region’s pharmaceutical sector, announced last year, is seen as a rare purchase of a local rival by a leading Indian company.
The buyout is valued at $4 billion including Ranbaxy’s debt of about $800 million, which will be passed on to Sun.
In 2008, Japan’s Daiichi Sankyo had acquired a 63.9 per cent stake in Ranbaxy for $4.2 billion.
But the value of its investment eroded significantly, as Daiichi couldn’t ensure compliance with norms at Ranbaxy’s factories supplying drugs to the US.