India signs cooperation agreement with World Food Programme for 2023-27
Sun Pharmaceutical Industries is all set to buy Ranbaxy Laboratories for $3.2 billion all-share deal thus creating the fifth-largest generic drug maker. Both the firms are struggling with quality issues in the United States market.
Ranbaxy which is India’s biggest drugmaker by sales has been banned from exporting drug ingredients to the US. On the other hand Sun Pharmaceutical’s Karkhadi plant too is barred from shipping products by the US FDA.
Severe shortage of regulatory inspectors has affected India’s pharmaceutical industry which supplies more than 20% of the world’s generic drugs.
According to the buy out agreement Ranbaxy shareholders will get 0.8 of a Sun Pharmaceutical share for each Ranbaxy share. Ranbaxy shares have been valued at Rs 457 apiece. This represents 18% premium to average share price.
Fear of possible pullback from India by Daiichi Sankyo has been calmed by Tokyo analysts. Jefferies analyst Naomi Kumagai had this to say on the pact. “I wouldn’t call this an exit. It’s an ownership transfer.”
Daiichi Sankyo said the US Attorney’s Office had issued an subpoena to Ranbaxy seeking information related to the company’s Toansa plant.