April 6, 2014 was a red letter day for the Indian pharmaceutical
industry as Sun Pharmaceutical Industries Limited
("Sun Pharma") and Ranbaxy Laboratories
Limited ("Ranbaxy") announced that they
had entered into definitive documents for merger of Ranbaxy with
Sun Pharma ("Transaction"). The
announcement came amidst reports of faltering standards at
Ranbaxy's manufacturing plants and consequent import bans
imposed on Ranbaxy by the United States Food and Drug
Administration. The Transaction would give rise to a
pharmaceuticals giant – the fifth-largest specialty generics
company in the world and the largest pharmaceutical company in
As is the case with other high value M&A transactions, there
were concerns that the combined entity post this Transaction could
potentially stifle competition with its sizeable portfolio of
specialty and generic products. The Transaction came under the
scrutiny of antitrust regulators in India and the United States of
America. There were also allegations of violations of India's
insider trading regulations by an entity connected to Sun Pharma.
Despite these challenges, the Transaction has proceeded full steam
ahead, with the Competition Commission of India granting its
conditional approval to the Transaction on December 5, 2014. The
United States Federal Trade Commission is also expected to clear
the Transaction soon.
If all goes well, this Transaction could define the global
pharmaceuticals landscape for the foreseeable future. All eyes are
on Mr. Dilip Shanghvi, the managing director of Sun Pharma, to see
whether Mr. Shanghvi's magic will convert Ranbaxy into a
'crown jewel' or a 'white elephant' for Sun Pharma.
This M&A Lab analyzes the legal, regulatory, tax and commercial
considerations pertaining to the Transaction.
For a detailed analysis of the commercial, legal,
regulatory and tax considerations and to access the M&A Lab,
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