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Business News/ Companies / News/  Sun Pharma-Ranbaxy merger gets BSE, NSE clearance
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Sun Pharma-Ranbaxy merger gets BSE, NSE clearance

The firms now need clearances from the high court and the Competition Commission of India, among others

According to norms, companies seeking to execute merger or de-merger strategies need to obtain a ‘no-objection certificate’ from stock exchanges. Photo: BloombergPremium
According to norms, companies seeking to execute merger or de-merger strategies need to obtain a ‘no-objection certificate’ from stock exchanges. Photo: Bloomberg

New Delhi: The $4 billion (around 24,720 crore) merger of Ranbaxy Laboratories Ltd with Sun Pharmaceutical Industries Ltd has got clearance from the two leading stock exchanges—the BSE and the NSE.

The “no-objection" from the two exchanges would allow the two companies to file their scheme of amalgamation with the high court for further clearance of the deal and marks one of the numerous regulatory approvals that Sun Pharmaceutical and Ranbaxy need for the transaction.

The deal had separately come under the scanner of capital markets regulator Sebi (Securities and Exchange Board of India) for alleged insider trading violations and the present “no-objection" from the exchanges.

The combination of Sun Pharmaceutical and Ranbaxy creates the fifth-largest speciality generics company in the world and the largest pharmaceutical company in India.

The two firms now need clearances from the high court and Competition Commission of India (CCI), among others.

In separate communications to Sun Pharmaceutical and Ranbaxy, the NSE and the BSE said they are granting their “no-objection approval" to the proposed scheme and that this observation letter would be valid for six months, within which period the companies would have to file the scheme with the high court for further clearance.

The exchanges have noted that the confirmation given by the company stating that the scheme does not violate, override or circumscribe the provisions of various regulatory norms.

“Accordingly, we do hereby convey our ‘no-objection’ with limited reference to those matters having a bearing on listing /delisting/ continuous listing requirements within the provisions of the Listing Agreement, so as to enable the company to file the scheme with the high court," the exchanges said in a similar-worded circulars.

According to norms, companies seeking to execute merger or de-merger strategies need to obtain a “no-objection certificate" from stock exchanges.

Sun Pharmaceutical, in April, had announced its plan to acquire rival Ranbaxy from its Japanese parent, Daiichi Sankyo Co. Ltd, in an all-stock deal valued at $3.2 billion. The deal also involves a debt component of $800 million.

The transaction valued Ranbaxy at 2.2 times its $1.8 billion revenue for 2013, or about 457 per share.

The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of speciality and generic products marketed globally.

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Published: 21 Jul 2014, 02:14 PM IST
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