Sun Pharma Industries to Acquire Ranbaxy in $3.2B Deal

India’s biggest drugmaker by market value, Sun Pharmaceutical Industries has agreed to buy Ranbaxy Laboratories from Japan’s Daiichi Sankyo Co, which holds approximately 63.4% of the outstanding shares of Ranbaxy, in a $3.2 billion all-share deal, creating the world’s fifth-largest generic drug maker.

Under terms of the agreed transaction, Ranbaxy shareholders will receive 0.8 of a Sun Pharma share for each Ranbaxy share they own.

[via Reuters]”This transaction helps us transition to our long-held ambition of becoming a successful Indian company in the global pharmaceutical space,” Dilip Shanghvi, managing director of Sun Pharma said in a conference call with analysts. Including the assumption of Ranbaxy debt, the overall value of the transaction is $4 billion.

Sun Pharma, maker of generic drugs including copies of Eli Lilly (LLY)’s Cymbalta and Johnson & Johnson (JNJ)’s Doxil, expects $250 million in revenue and reduced costs by the third year post closing of the transaction, according to a company statement.

The proposed deal price, which represents an 18% premium to Ranbaxy’s 30-day volume-weighted average stock price, has been unanimously approved by the Boards of Directors of Sun Pharma, Ranbaxy, and Ranbaxy’s controlling shareholder, Daiichi Sankyo.

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