Sun Pharma has acquired the troubled Ranbaxy in a $4 billion (Re. 24000 Crore) deal. The buy out will make Sun Pharma the fifth-largest generics company (making unbranded medicines) globally and the largest pharmaceutical company in India. Under the deal, Sun Pharma former will acquire 100% of Ranbaxy in an all-stock transaction. The deal being termed as a landmark in Indian pharma space is estimated at $4 billion. The merged entity would make Sun a new market leader in the fragmented Rs 75,000 crore Indian pharma market, with the company enjoying 9.3% market share.
Ranbaxy shareholders will get 0.8 of a Sun Pharma share for each Ranbaxy share they own. The exchange ratio implies a valuation of Rs 457 for each Ranbaxy share, a premium of 18% to Ranbaxy's 30-day average share price. Ranbaxy, known as India's homegrown pharma MNC, ever since it had been bought by Daiichi Sankyo of Japan, was in regulatory troubles with the US Foods and Drugs Adminiustartion. The FDA had banned imports from many of its plants in India, the latest example being in Toansa, Panjab.