After almost six years and approximately $5 billion in investment, Daiichi Sankyo finally comes to terms with the failed acquisition. Sun Pharmaceuticals, the second largest specialty generic drugs manufacturer from India, announces purchase of Ranbaxy Laboratories from Daiichi Sankyo in April 2014 for roughly $3.2 billion ($4 billion with debt). The all stock trade reduced Daiichi Sankyo’s 63.4% stake in Ranbaxy to approximately 8.9% of the new merged entity, with the conversion at 1 Ranbaxy share being equivalent to 0.8 of the Sun share. The deal valued Ranbaxy at an 18% premium of its 30-day volume weighted average price. The new entity would have pro-forma revenues of around $4.2 billion for the FY14. Daiichi Sankyo would become the second
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This could also address Daiichi Sankyo’s denial of the compliance issues.
The Sun Ranbaxy acquisition:
With a reputation that precedes him, Dilip Shanghvi, the Managing Director of Sun Pharmaceuticals, has had enough experience with acquiring failing companies and turning its fortunes. Ranbaxy Laboratories, was Sun’s 18th acquisition since 1996, and there was and still is consensus in the Pharmaceutical Industry that this move is in the best interests of all the players involved.
Shanghvi, who has led the company from the front, brings the type of decisive leadership Ranbaxy had lacked under Daiichi Sankyo. Without a strong leadership and direction, Ranbaxy had floundered and cost Daiichi dearly, eventually leading to its sale. Irrespective of how it was put across, this was a distress sale. Ranbaxy had been acquired by Daiichi Sankyo as a key part in their overseas strategy and was to serve as its foot into the generic drug market. But after six long, painful years and burning away around $5 billion, Ranbaxy was sold to Sun Pharma at a discount 38% of its acquisition price in 2008.
Why did SUN acquire Ranbaxy? Why might SUN succeed where Daiichi
This could also address Daiichi Sankyo’s denial of the compliance issues.
The Sun Ranbaxy acquisition:
With a reputation that precedes him, Dilip Shanghvi, the Managing Director of Sun Pharmaceuticals, has had enough experience with acquiring failing companies and turning its fortunes. Ranbaxy Laboratories, was Sun’s 18th acquisition since 1996, and there was and still is consensus in the Pharmaceutical Industry that this move is in the best interests of all the players involved.
Shanghvi, who has led the company from the front, brings the type of decisive leadership Ranbaxy had lacked under Daiichi Sankyo. Without a strong leadership and direction, Ranbaxy had floundered and cost Daiichi dearly, eventually leading to its sale. Irrespective of how it was put across, this was a distress sale. Ranbaxy had been acquired by Daiichi Sankyo as a key part in their overseas strategy and was to serve as its foot into the generic drug market. But after six long, painful years and burning away around $5 billion, Ranbaxy was sold to Sun Pharma at a discount 38% of its acquisition price in 2008.
Why did SUN acquire Ranbaxy? Why might SUN succeed where Daiichi