Sun Pharma and Ranbaxy Laboratories announced that they have entered into definitive agreements pursuant to which the former will acquire 100% of Ranbaxy in an all-stock transaction. The deal being termed as a “landmark transaction”, has been estimated at $4 billion.
Under terms of the agreed deal, Ranbaxy shareholders will get 0.8 of a Sun Pharmaceutical share for each Ranbaxy share they own. The exchange ratio represents an implied value of Rs 457 for each Ranbaxy share, a premium of 18% to Ranbaxy’s 30-day volume-weighted average share price and a premium of 24.3% to Ranbaxy’s 60-day volume-weighted average share price, in each case, as of the close of business on April 4, 2014, said the statement.
The combination of Sun Pharma and Ranbaxy will be the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India.