Tokyo: Japan’s third largest drug maker Daiichi Sankyo Co. Ltd will begin its tender offer for India’s biggest pharmaceutical manufacturer Ranbaxy Laboratories Ltd on 16 August, the company said in a statement on Monday.
Daiichi Sankyo plans to purchase as many as 92,519,126 shares for about Rs6,800 crore, Daiichi said in a statement to the Tokyo Stock Exchange on Monday.
The company agreed in June to acquire more than 50.1% of Ranbaxy for Rs737 a share, a 46% premium over the Indian company’s 8 August closing price, Bloomberg data shows.
Drug deal: A file photo of Ranbaxy’s Malvinder Singh and Daiichi Sankyo’s Takashi Shoda. (Photo: Harikrishna Katragadda/Mint)
Tokyo-based Daiichi may pay as much as $4.6 billion (Rs19,320 crore) for Ranbaxy, which includes the 34.8% stake owned by chief executive officer Malvinder Singh and his family. Daiichi will also buy a portion of about $1 billion of preferential stock Ranbaxy will issue. Daiichi must also offer to buy the remaining 20% from shareholders under Indian takeover rules.
The Ranbaxy purchase gives Daiichi a company that makes and sells drugs in 56 countries, including emerging markets in India, China and eastern Europe.
The deal follows Daiichi’s May takeover of German biotechnology company U3 Pharma AG for €150 million ($225 million) to gain cancer treatments.
After the purchase, Daiichi Sankyo moves to ninth in the $120 billion generic-drug market ranks, behind leaders Teva Pharmaceutical Industries Ltd and Novartis AG’s Sandoz unit.
Ranbaxy has purchased seven companies in the past two-and-a-half years, including Romania’s Terapia SA. The company has been built over the past three decades by copying blockbuster drugs such as Merck and Co. Inc.’s Zocor cholesterol treatment drug and selling them for a fraction of the price in countries including France, Germany and the US.
Stuart Biggs in Tokyo contributed to this story.