INDIA BUSINESS WORLD - NOVEMBER 1^st – NOVEMBER 15^th 2008

DAIICHI SANKYO COMPLETES RANBAXY DEAL, HOLDS 63.92%

JAPANESE pharma company Daiichi Sankyo has completed the $4.5-billion acquisition of India's largest drugmaker Ranbaxy Laboratories by picking up the promoter's remaining 11.4% stake for Rs 3,537.6 crore. With this transaction, Daiichi Sankyo now holds 63.92% stake or 2.6 crore shares in Ranbaxy.

Daiichi Sankyo has bought the promoter's remaining 48 million shares through an off-market transaction at a price of Rs 737 per share. "As a result of the acquisition, the Singh family has ceased to be the promoters of the company and Daiichi Sankyo has become the promoter of the company with effect from November 7," Ranbaxy informed the Bombay Stock Exchange (BSE).

Last month, the Japanese company acquired 52.5%. This included around 21% of the promoter's stake, 20% stake from the open offer in addition to the equity acquired through subscription of preferential shares and warrants.

In June this year, Daiichi Sankyo had agreed to acquire at least 50% stake in the Indian drugmaker through multiple transactions, including buying the promoter's entire 34.8% stake at Rs 737 per share.

Daiichi Sankyo president and CEO Takashi Shoda said, "We are pleased to announce that all the planned transactions of this landmark deal have been successfully completed. We are determined to work with Ranbaxy to realise sustainable growth." Ranbaxy CEO and MD Malvinder Singh said, "This puts us well on the path to create a hybrid business model that will unlock the strengths of both companies to bring unprecedented value to all stakeholders."

Ranbaxy will continue to work as an independent and autonomous company. The Gurgaon-based company had received Rs 3,585 crore from Daiichi Sankyo for the preferential issue of equity shares and warrants.

The fund will be used to drive the company's growth through organic and inorganic means while retiring some debt at an appropriate time, a Ranbaxy release said. This brings to an end all speculations about one of the biggest buyouts of any Indian company by a global major.

Following the US drug regulator FDA's legal action and subsequent ban of its drugs in the US, there were speculations that Daiichi might withdrew the deal. Later, the promoter's had unsuccessfully tried to execute the deal through the stock exchange to save 11% capital tax gain amounting to around Rs 1,000 crore.