Daiichi Sankyo begins selling its stake in Sun Pharma
21 Apr 2015
Japanese drug maker Daiichi Sankyo said on Monday that its board has approved the sale of a part or all of its 9 per cent holding in Indian drug maker Sun Pharmaceutical. The stake is worth over Rs22,000 crore.
Daiichi has been holding around 9 per cent stake in Sun Pharma after the merger of Ranbaxy Laboratories with Sun.
"The board of directors of Daiichi Sankyo Company Ltd approved a resolution on 20 April to sell entire or part of its holding of Sun Pharmaceutical Industries Ltd shares," the Japanese firm said in a statement.
Reports today said Daiichi has already begun the stake sale process.
In the event of Daiichi Sankyo selling only part of its stake, it won't remain "a major shareholder" in Sun Pharma although its existing business partnership with the Indian firm will continue.
At today's closing price of Rs1,044.10 of Sun Pharma, Daiichi's stake is worth around Rs22,445 crore.
Last month, Sun Pharma had announced completion of its absorption of Ranbaxy Labs, almost a year after announcing the $4 billion deal.
As part of the deal, Ranbaxy shareholders were to receive 0.8 Sun Pharma shares for every Ranbaxy share they held.
Daiichi Sankyo, which had acquired a majority stake in Ranbaxy in 2008 for around Rs22,000 crore, held 63.4 per cent in the Gurgaon-based firm at the time of the merger.
"From the perspective of the improvement of corporate value, Daiichi Sankyo has performed a review of the Sun Pharma shares and reached a conclusion to sell the shares entirely or partially," it said.
Daiichi Sankyo said it will make an announcement about the impact of any gain or loss on the sale of Sun Pharma shares when results for 2014-15 are announced.
The merger with Ranbaxy has fortified Sun Pharma's position as the world's fifth largest specialty generic pharma firm and the top-ranking domestic one with a significant lead in the market share.