Japan's Daiichi Sankyo to acquire majority stake in Ranbaxy

11 June 2008

The promoter family of generic drug maker Ranbaxy, the Singh family, which is also the largest and controlling shareholder of the company, has entered into a deal with one of the largest pharmaceutical companies in Japan, Daiichi Sankyo, to sell its majority stake in Ranbaxy, in a transaction that values it at $8.5 billion.

Ranbaxy and the Singh family have signed a binding share purchase and share subscription agreement (SPSSA) with Daiichi Sankyo, enabling the Japanase pharmaceuticals firm to acquire the entire shareholding of the Singh family in Ranbaxy and at Rs737 per share amounting to a total transaction valueDaiichi's offer for Ranbaxy amounts to $2.7-3.7 billion at current exchange rates.

Daiichi Sankyo will also make an open offer to acquire controlling stake of 51 per cent in the company at Rs737 per share. The total transaction value is expected to be between $3.4-4.6 billion and would value Ranbaxy Laboratories at $8.5 billion.

Under the deal, Daiichi Sankyo will buy the entire 34.8 per cent controlling stake of Ranbaxy's founders, the Singh family, and also launch a bid to buy shares from the market.

The SPSSA has been approved by the boards of both companies and the transaction is expected to be completed by end March 2009.

"The proposed transaction is in line with our goal to be a global pharma innovator and provides the opportunity to complement our strong presence in innovation with a new, strong presence in the fast growing business of non-proprietary pharmaceuticals," said Takashi Shoda, president and CEO, Daiichi Sankyo Company, Limited.