Following the successful closure of the merger with drug maker ranbaxy, dilip shanghviled sun pharma said on wednesday that it is initiating the. This case attempts to enumerate a step by step procedure for calculating cumulative abnormal return car for the case of sun pharma ranbaxy merger. Why is sun pharmaceutical in trouble after the ranbaxy. Sunranbaxy deal in april 2014, sun acquired ranbaxy in a shares swap deal. Over the trailing four quarters, sun pharma has overshot ranbaxy posting a cumulative turnover consolidated of rs 15,108. Merger with ranbaxy laboratories poses challenges for sun. Drawn from the data of sun pharma investors book 2017 before merge, ranbaxy used aqua logistics services to. Sun pharmas acquisition of ranbaxy in a share swap deal, its stake was altered to 8. The merger, which is all stock, will give ranbaxy shareholders 0. The success of merger will depend on effectively resolving quality. The sun pharma merger with ranbaxy will blend the complementary market strengths and areas of expertise of each company and create a powerful pharma.
The dynamics of major indian takeovers their causes. The sun pharmaceuticalranbaxy combine, indias largest drugmaker, now has a toplevel team in place. Investors welcomed the completion of the merger, with sun pharma shares rising 1. The merger will make sun pharma the largest pharma company in india with pro forma revenues of. Acquisition, post merger, integration, pharmaceutical sector, synergies. This is a stock only merger, which means no cash will be paid out. Takeover regulations, 2011, sun pharma has announced an open offer for 28. Last week, after announcement of closure of merger deal with ranbaxy, sun pharma said that ranbaxy will be delisted from the indian stock exchanges. Merger between sun pharma and daiichi sankyos ranbaxy. The allstock deal will double sun pharmas revenues at a cost of eight per cent dilution in equity and earning per share. Daiichi sankyo, sun pharma and ranbaxy reached agreement on the exchange ratio of 0. The exchange ratio represents an implied value of rs 457 for each ranbaxy share, a.
In 2008, japanese pharmaceutical company daiichi sankyo acquired a controlling share in ranbaxy and in 2014, sun pharma acquired. Ranbaxy was present in number of countries in the world with offices in most of them. Announcement regarding merger between sun pharma and. To create worlds 5th largest specialty generic pharma company no. Dcat value chain insights is an online information resource offering news and analysis on the issues impacting the business of pharmaceutical development and manufacturing. Read expert opinions, top news, insights and trends on the economic. Without getting too much into financials and valuations, let us look at the deal from the perspective of each of the three stake holders daiichi sankyo, ranbaxy and. Experts say ranbaxy acquisition positive for sun pharma. The big news of the week was about a megamerger of two of indias largest pharma companies, sun pharma and ranbaxy. Sun pharma announces closure of merger deal with ranbaxy. Car is an academic way of analyzing merger performance based on stock market returns of both acquirer and. After the acquisition, suns promoters stake will come down to 54. Sun pharma to delist ranbaxy after merger huffpost india.
The acquisition is expected to be accretive to sun pharmas cash earnings per share in the first full year. Sun pharma, a large indian drug maker, has announced acquisition of ranbaxy laboratories, another indian pharmaceutical company. It is an indian multinational pharmaceutical company headquatered in mumbai. A merger in which sun pharma is the surviving company and ranbaxy is the company to be absorbed. Over the past 5 days, ranbaxy shares jumped 22%, while sun pharma. Sun pharma announces closure of merger deal with ranbaxy beginning today, integration to focus on enhancing productivity. Sun pharma and ranbaxy to merge, create giant pharma co. What was sun pharmas rationale for acquiring ranbaxy, despite the. Ranbaxy delists on completion of merger with sun pharma. Shares of sun pharmaceutical industries and ranbaxy laboratories were trading higher by 3% each on the bourses ahead of record date set for the merger. Ownership of ranbaxy changed twice over the course of its history.
As of march 2014, the promoter holding in sun pharma and ranbaxy stands at 63. Sun pharma and ranbaxy merger cumulative abnormal return. Ranbaxy will merge into sun pharma and the shareholders of ranbaxy will receive 0. Through this merger completion, ranbaxy will be delisted from the indian stock exchanges, with ranbaxy shareholders receiving 0. Ftc allows ranbaxysun pharma merger divestiture order. Dcat value chain insights covers the full spectrum of the pharmaceutical manufacturing value chain from raw materials to intermediates to drug substances small molecules and biologics to drug products solid. Sunpharma and ranbaxy merge in 2014 to create indias largest and the worlds fifth largest pharma company. Shweta mahadik 110 surendra saroj 111 sushmitha raikar 1 swapnil rajwade 115 trinette dmello 117 valen miranda 119 introduction sunpharmaceuticals sunpharmaceuticals was established in 1983 in vapi with five products to analyze sickness. Sun pharmaceutical industries limited sun pharma and ranbaxy laboratories limited ranbaxy set the indian pharmaceutical industry abuzz with excitement on april 6, 2014 when they released a press statement announcing that they had entered into definitive documents under which sun pharma would acquire 100 percent of ranbaxy. The deal has reaped the benefit in the market price also as sun pharma market price after the date of announcement of merger with ranbaxy till the record the date of merger has touch a new high to inr 1200 per share i. Transcript sun pharma ranbaxy merger conference call. We specialize in strategic legal, regulatory and tax advice coupled with industry expertise in.
Postmerger with ranbaxy, sun pharma becomes 5th largest. Information and announcements about this can be found on this page. Competition commission of india combination registration. Under the order, announced friday, sun must transfer ranbaxys rights to minocycline in 50mg, 75mg and 100mg tablet strength to indiabased torrent pharmaceuticals.
In some of the countries it was seen as innovator company in line with pfizer, merck etc. The merger with ranbaxy laboratorie s was intended to help indias largest drug maker. Read expert opinions, top news, insights and trends on the economic times. In sunranbaxys case, however, sun pharmas results show a sequential decline in sales by 11. The company was also assigned rights to nominate one nominee director on suns board.
Sun pharma completes ranbaxy merger deal, ranbaxy shares. Ranbaxy will be merged with sun pharma by means of a share swap. To bring on track halol facility, sun pharma has been facing supply constraints due to a ban on its own halol plant. Under these agreements, ranbaxy will merge into sun pharma and the shareholders of ranbaxy will receive 0. Ebidta margin at 32% industry average 19% and net margin at 20% industry average 12%. Sun pharmaceutical industries ltd is buying ranbaxy laboratories ltd through an allstock merger in which five shares of ranbaxy will fetch four shares of sun pharma. Ranbaxy was the first foreign generics manufacturer to sell drugs in the us. To study the need of sun pharma and ranbaxy merger. Press release for closure of sun ranbaxy merger sun pharma. Sun pharma completes ranbaxy merger deal, ranbaxy shares to be delisted. Sun pharma ranbaxy acquisition linkedin slideshare. The sun pharma merger with ranbaxy will blend the complementary market strengths and areas of expertise of each company and create a powerful pharma force.
On pro forma basis for 12 months ended december 2014, sun pharmas gross margin stands at 76% industry average 62%. Batliboi llp as their valuers to arrive at the share swap ratio. Tell a friend print home investors archives sun pharma ranbaxy merger. Sun pharma ranbaxy deal the financial model behind. Sun pharmaceutical industries ltd has become the worlds fifth largest generics drugs maker after buying ranbaxy laboratories ltd from japans daiichi sankyo co. It was a well thought out decision by the management of sun pharmaceutical industries. Sun pharmas annual sales revenue before and after the acquisition of ranbaxy source. Sun pharma completed the acquisition of ranbaxy laboratories limited, an integrated, research based, international pharmaceutical company, on 25 th march 2015. Sun will expand ranbaxys overthecounter or otc brands to more countries.
Transaction, sun would be indirectly acquiring ranbaxys shareholding of 46. Closure of the deal about 10 days ago catapulted the sunranbaxy combine to the top of the pharmaceutical charts with a. Sun pharma ranbaxy nishith desai associates nda is a research based international law firm with offices in mumbai, bangalore, silicon valley, singapore, new delhi, munich. Sun pharma, ranbaxy move closer to finalizing merger. Yearonyear comparisons are not relevant because of the merger.