The Merger of Ranbaxy and Daiichi
A REPORT ON
Ranbaxy-Daiichi Deal
1/26/2012
Ranbaxy-Daiichi Deal
Introduction:
Daiichi Sankyo bought Ranbaxy for $4.6 billion in June 2008. This report studies the implications of the merger between Ranbaxy and Daiichi Sankyo, from an intellectual property as well as a market point of view. There are many critical events happening in international pharma market including the growing preference for generics, increasing dominance of emerging markets such as India, fast approaching patent expiry etc. Also, this deal involves 2 major players who are the largest among their respective markets.
Background:
Daiichi Sankyo Co. Ltd. acquired 34.8% of Ranbaxy Laboratories Ltd. from its promoters and increased its stake through preferential allotment, public offer and preferential issue of warrants to acquire a majority in Ranbaxy, i.e. at least 50.1%. After the acquisition, Ranbaxy operates as Daiichi Sankyo’s subsidiary but supposed to manage independently under the leadership of its current CEO & Managing Director Malvinder Singh. Mr. Singh left the company in 2009 with a 4.5 billion rupees severance package.
Why:
Daiichi Sankyo wanted to acquire a drug maker that specialized in generics after Japan eased its laws allowing sales of these cheaper versions of expensive drugs. The deal was a trendsetter in Indian market for future M&A deals. India's family-owned companies realized that it was not shameful to sell and profit from their businesses.
Benefits Expected:
Operational:
The main benefit for Daiichi Sankyo from the merger was Ranbaxy’s low-cost manufacturing infrastructure and supply chain strengths. Ranbaxy gained access to Daiichi Sankyo’s research and development expertise to advance its branded drugs business.
Expansion:
Daiichi Sankyo’s strength in proprietary medicine complements Ranbaxy’s leadership in the generics segment and both companies acquire a broader product base, therapeutic focus areas
and well distributed risks. Ranbaxy
Ranbaxy-Daiichi Deal
1/26/2012
Ranbaxy-Daiichi Deal
Introduction:
Daiichi Sankyo bought Ranbaxy for $4.6 billion in June 2008. This report studies the implications of the merger between Ranbaxy and Daiichi Sankyo, from an intellectual property as well as a market point of view. There are many critical events happening in international pharma market including the growing preference for generics, increasing dominance of emerging markets such as India, fast approaching patent expiry etc. Also, this deal involves 2 major players who are the largest among their respective markets.
Background:
Daiichi Sankyo Co. Ltd. acquired 34.8% of Ranbaxy Laboratories Ltd. from its promoters and increased its stake through preferential allotment, public offer and preferential issue of warrants to acquire a majority in Ranbaxy, i.e. at least 50.1%. After the acquisition, Ranbaxy operates as Daiichi Sankyo’s subsidiary but supposed to manage independently under the leadership of its current CEO & Managing Director Malvinder Singh. Mr. Singh left the company in 2009 with a 4.5 billion rupees severance package.
Why:
Daiichi Sankyo wanted to acquire a drug maker that specialized in generics after Japan eased its laws allowing sales of these cheaper versions of expensive drugs. The deal was a trendsetter in Indian market for future M&A deals. India's family-owned companies realized that it was not shameful to sell and profit from their businesses.
Benefits Expected:
Operational:
The main benefit for Daiichi Sankyo from the merger was Ranbaxy’s low-cost manufacturing infrastructure and supply chain strengths. Ranbaxy gained access to Daiichi Sankyo’s research and development expertise to advance its branded drugs business.
Expansion:
Daiichi Sankyo’s strength in proprietary medicine complements Ranbaxy’s leadership in the generics segment and both companies acquire a broader product base, therapeutic focus areas
and well distributed risks. Ranbaxy