Ranbaxy Acquisition by Click to edit Master subtitle style Daiichi Sankya

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Ranbaxy

Ranbaxy Laboratories Limited (Ranbaxy), India's largest pharmaceutical company. is an integrated, research based, international pharmaceutical company, producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies.

It

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Daiichi-Sankya

Research & Development, Manufacturing , Import, and Sales & Marketing of pharmaceutical products SANKYO's goal is to establish itself as a "Global Pharma Innovator."

DAIICHI

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Acquisition
Buying

of one company by other May be friendly or hostile Usually refers to purchase of smaller firms by larger ones Types: 1. Buyer buys the shares 2. Buyer buys the asset of target company

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Acquisition

Disadvantages: Advantages Increase in sales/ Conflicts with new management revenues 4/22/12

About Ranbaxy

-Integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines. -Serving in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 11 countries. -Ranbaxy Laboratories went public in 1973 - The CEO of the company is Mr. Atul Sobti after Mr. Malvinder Mohan Singh has stepped down in May 2009.

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Ranbaxy Success Story

- In 1998, Ranbaxy entered US the worlds largest pharmaceutical market and now the biggest market for Ranbaxy, accounting for 28% of Ranbaxys sales in 2005 - September- 1999 Ranbaxy out-licensed its first once-a-day formulation to a multinational company - June 23, 2006 received from the U.S Food and Drug Administration a 180-day exclusivity period to sell Simvastatin (Zocor) in the U.S. as a generic drug at 80 mg strength

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About Daiichi-Sankyo

- Daiichi-SankyoCompany, Ltd was established in 2005 through the merger of two leading Japanese pharmaceutical companies. -Discovery of new medicines in the areas of infectious diseases, cancer, bone and joint diseases, and immune disorders - Continuous development of novel drugs that enrich the quality of life for patients around the world -Presently, Daiichi-Sankyo is Japans second largest drug maker

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Journey of Daiichi-Sankyo
-

1970, in Basle a Sankyo office was opened to keep contact with the big Swiss pharma companies 1985, Sankyo Europe was established in Dusseldorf Daiichi Pharmaceutical Europe

-1988, -1993,

established Daiichi Pharmaceutical UK, Ltd. In London Acquisition of Luitpold Werke, by Sankyo
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-1990,

Ranbaxy Acquisition

Ranbaxy is a well known name in the pharmaceutical company in India, with large amount of shares both in Bombay and
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Ranbaxy Acquisition:

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Shareholding Pattern (Before Acquisition)

Ranbaxy Acquisition
Shareholding

Pattern (After Acquisition)

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Reasons for Takeover

Daiichi Sankyo and Ranbaxy believe this transaction provides the significant long-ter value for all stake-holders through: -A complementary business combination -An expanded global reach -Strong growth potential -Cost competitiveness by optimizing usage of R&D and manufacturing facilities

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Benefits of the Deal

-

a win-win for Ranbaxy and Daiichi

Competitiveness by optimizing usage of R & D and manufacturing facilities of both companies The combination of the two companies will give Ranbaxy access to Daiichis expertise in research while the Japanese company will benefit form the low-cost production on the sub-continent, amid a deepening profits crisis in Japans drugs industry will gain position of major player in 4/22/12 Generics

-Daiichi

Outcome of the Deal

-The

acquisition will help Daiichi Sankyo to jump from number 22 in the global pharmaceutical sector to number 15 -Ranbaxy will gain easier access to the muchcoveted Japanese market by operating from within the Daiichi Sankyo fold, bypassing a lot of European and U.S companies that are finding it difficult to enter the Japanese market, where safety and testing requirements are a lot higher.

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Recent Progress
-13%

rise in annual sales, helped by a strong combination from Ranbaxy Laboratories Ltd, Indias largest drug maker by revenue, which it bought two years ago. sales increased by 16% in the US and by 28.2% in Europe. In India, revenue rose 292.8% to 59.9 billion, mainly on Ranbaxys sales. Ranbaxy posted a net profit of Rs 963 crore for the quarter ended 31 March, against a loss of Rs 761 crore a year ago.
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-Daiichis

Outcome of the Deal

-Big

threat to the survival of the domestic generic industry

May just dampen the motivation of other Indian aspirants who want to emulate Ranbaxys success in the global Pharma. - The acquisition will help Daiichi Sankyo to jump from number 22 in the global pharmaceutical sector to number 15
-Ranbaxy

will gain easier access to the muchcoveted Japanese market by operating from within 4/22/12 the Daiichi Sankyo fold, bypassing a lot of

Effect on Stock Market

-The

share price of Ranbaxy rose 3.86 % to Rs 526.40 on June 9, two days before the company announced its buyout by Daiichi Sankyo. The benchmark Sensex plunged 506 points the same day. 10, a day before the deal was announced, the Ranbaxy scrip surged 6.52 % to Rs 560.75 and the Sensex fell 177 points. The stock ended almost flat at Rs 560.80 on June 11
4/22/12 11 The reason as to why the Ranbaxy stock

-June

-June

Conclusion
-The -

deal is a win-win for both Ranbaxy and Daiichi

For Daiichi, it was important to have some kind of generic play that Novartis has with Sandoz, which is the second largest generic company in the world is a USD 30-35 billion company. May be Daiichi at the very start of that graph is trying to do exactly that. have a great play in Ranbaxy, which has a manufacturing and research base. It will also 4/22/12 benefit from the cost-competitive advantage

-Novartis

-They

References:
www.ranbaxy.com www.indiamarks.com www.moneycontrol.com www.ndtvprofit.com www.daiichisankyo.com

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u o Y k n a h T
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