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This model will be copied by drug firms globally: Malvinder

This model will be copied by drug firms globally: Malvinder
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First Published: Thu, Jun 12 2008. 12 37 AM IST

Looking ahead: Ranbaxy Labs’ chief executive Malvinder Singh. (Harikrishna Katragadda / Mint)
Looking ahead: Ranbaxy Labs’ chief executive Malvinder Singh. (Harikrishna Katragadda / Mint)
Updated: Thu, Jun 12 2008. 12 37 AM IST
New Delhi: Shortly after a press conference to announce the proposed acquisition of a majority stake in Ranbaxy Laboratories Ltd by Daiichi Sankyo Co. Ltd, in an interview with Mint, the Indian firm’s Malvinder Singh, whose family is to receive some Rs10,000 crore as part of the transaction, shrugged off risks associated with the deal and said it would be transformational for the global pharmaceutical industry. The coming years, he predicted, would see several more such deals among global and Indian drug makers. Edited excerpts:
Besides the payout for your family stake in Ranbaxy, the company itself will get a cash infusion of $1 billion. How is it going to be deployed?
We’ll take out the debt, and, with that, we’ll have around Rs3,000 crore— which we’ll use for organic and inorganic growth.
/Content/Videos/2008-06-12/1106 rainbaxy_MINT_TV.flv
And the cash you’ll get as a family? Any plans for that yet?
We’ll use it for our various businesses, including the family’s, we haven’t made the decision of what, when and how much (the Singh family is the promoter at drugs retailer SRL Ranbaxy, Fortis Healthcare and Religare Securities).
Is your payment, which is in cash, coming in one shot?
Yes. It will come in by the end of this year (Ranbaxy’s financial year is January to December).
What are the big risks you see before this model? What will not work?
I think there are many opportunities in terms of what will evolve, and what we can create—and our focus, will be to do everything possible to make it happen.
Sure. But is there anything that could go wrong?
There are always things that can go wrong. But, the focus then is, you will sit down, discuss and deal with those issues...and make sure you do things that you’re going to succeed in.
Earlier today (Wednesday), you made the distinction between a shareholder and a manager. But, given that you won’t have any shareholding left after this deal, how forceful will your management capabilities be in driving your vision?
It’s an independent listed company. I am the chairman and CEO. We (Daiichi Sankyo and Ranbaxy top managements) have a clear understanding of the kind of autonomy and independence the company will have. When I started as a management trainee in my career in Ranbaxy, I had the shareholding but not the (power of) decision making. Then, there was a phase where I had both the shareholding and the decision-making responsibility. Today, there is a phase, as a professional, I have no shareholding, but I have the decision making. It doesn’t make a difference.
You don't see that coming in the way of...
Looking ahead: Ranbaxy Labs’ chief executive Malvinder Singh. (Harikrishna Katragadda / Mint)
Absolutely, absolutely not. (We) will do what’s best for the company, and that’s what we have always done.
You talked about this being one of the transformational deals in the industry. One other example that comes close is perhaps Novartis-Sandoz. Do you see your deal with Daiichi Sankyo succeeding much more than those folks?
(Sandoz) was a division of Novartis. It was not acquired. It was not created. Here, the reason I’m saying it’s the first of its kind—Daiichi Sankyo and Ranbaxy are coming together, which are two separate companies. Sandoz was always there as a part of that system.
But, wouldn’t that make it much more risky in trying to achieve your goals?
No, it doesn’t. This is the model you will see (more of). This will get followed in many companies around the world as they move forward. They will have to do it. You will see that in the next few years. It’s just that we’ve seen it ahead of time...we have taken the boldness of doing it, and doing it first. Therefore, it’s path-breaking.
You’re relatively young in this business. You have at least 20-30 or so years to go as a businessman. Where do you see yourself 10 years down the line?
Doing many exciting things. As always.
josey.j@livemint.com
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First Published: Thu, Jun 12 2008. 12 37 AM IST