INDIA’S largest drug maker Ranbaxy is now a subsidiary of Japanese drug
major Daiichi Sankyo. The Tokyo-based company bought 21.9% stake from
the promoters and another 11% through allotment of preferential shares
at Rs 737 per share. This is in addition to the 20% stake that Daiichi
bought from the company’s shareholders through its open offer. These
three transactions take the Japanese company’s stake in Ranbaxy to
52.5%, making it the owner of the Indian company.
“The promoters today sold around 22% stake of their stake to Daiichi Sankyo through the off-market route. We expect to transfer the remaining stake (around 12.8%) to Daiichi Sankyo in the next few days. The money for the preferential allotment has already come to the company,“ Ranbaxy CEO and MD Malvinder Singh said.
Ranbaxy has now received Rs 3,585 crore ($736 million) through the preferential issue of equity shares and warrants from Daiichi Sankyo, Ranbaxy and Daiichi Sankyo said in a joint press release.
The Ranbaxy board has approved the preferential allotment of 4.6 crore shares (11%) at Rs 737 apiece with a three-year lock-in period and also issue of 2.3 crore shares as warrants at the same price. Daiichi Sankyo can convert these warrants into equity shares within 6-18 months of the issue.
The transaction ends months of uncertainty about the deal and the nature of the transaction.
“We have not calculated the tax liabilities, but will pay whatever we are required to pay,” Mr Singh added. Market regulator Sebi rejected an application by Ranbaxy to waive the price restriction for block deal to sell its stake to Daiichi Sankyo on the bourses. The promoters are now expected to pay a tax of around 11.3% or around Rs 650 crore for the 22% stake sale to Daiichi.
According to sources, the Ranbaxy promoters had entrusted to their financial services company, Religare, the task of securing the waiver from Sebi but it was unsuccessful in its attempts.
In June, Ranbaxy and Daiichi Sankyo had entered into an agreement where the latter would buy at least 50% stake in Ranbaxy through a series of transactions. As agreed during the agreement, Ranbaxy will remain an independent and autonomous company. Mr Singh will be appointed chairman of the board of directors, in addition to his existing responsibilities as CEO & MD of Ranbaxy. He will also become a member of the senior global management of Daiichi Sankyo. All management structures across Ranbaxy remains the same, the joint statement said.
Daiichi Sankyo president and CEO Takashi Shoda said: “We are delighted to announce the realisation of the global alliance with Ranbaxy. Two strong presence in innovation and the fast growing business of non-proprietary pharmaceuticals united, this hybrid business model will boost Daiichi Sankyo to achieve our goal to become a world-class pharmaceutical innovator, a global pharma innovator.”
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