Japan’s Daiichi Sankyo makes Ranbaxy Laboratories an offer it can’t refuse-$4.6 billion for a 50.1% stake in India’s largest drugmaker. Nandini Lakshman in BusinessWeek:
It was, perhaps, India’s best-kept corporate secret. On June 11, Ranbaxy Laboratories, the largest Indian drugmaker, said it was giving up control to Daiichi Sankyo, the No. 3 Japanese pharmaceutical company. Daiichi will buy a 50.1% stake in Ranbaxy for nearly $4.6 billion, or $17.14 per share, a 31% premium over Ranbaxy’s current share price. The deal doubles Ranbaxy’s market capitalization to $8.5 billion, putting Daiichi Sankyo at No. 15 in the global pharma pecking order.
Why would Ranbaxy Managing Director Malvinder Singh bail out of a company set up by his grandfather Bhai Mohan Singh and built by his visionary father, the late Parvinder Singh? At Ranbaxy’s televised press conference in New Delhi after the announcement of the sale, Singh confessed that “he had never ever anticipated not holding equity in Ranbaxy.”
More here:
Ranbaxy makes Indian corporate history
John Elliott on his Fortune blog:
The recent trend has been for Indian companies to take over foreign businesses – ranging from Jaguar cars to Corus steel – but this is the first time that a major successful Indian company has agreed to sell control to a foreign company.
It is also the first time that a successful business family – in this case the Singhs – has planned to sell control of its primary operations to anyone, either Indian or foreign.
It parallels Anil Ambani’s current negotiations to sell his Reliance Communications telecom company to MTN of South Africa in a deal that would make him the eventual owner of the combined group, which is expected to be based in Johannesburg.
