India’s Sun Pharmaceutical Industries Ltd said it will buy generic drug maker Ranbaxy Laboratories Ltd, which has hit regulatory snags in its key U.S. market over quality issues, in an all-share deal with total equity value of $3.2 billion.
Ranbaxy, India’s No.1 drugmaker by sales and 63.4 percent held by Daiichi Sankyo Co Ltd, is banned from exporting drug ingredients to the United States, while Sun Pharmaceutical’s Karkhadi plant is also barred from shipping products by the U.S. Food and Drug Administration.
Sun Pharmaceutical said Ranbaxy shareholders will get 0.8 Sun Pharma shares for each Ranbaxy share. It added that the merged company will become the world’s fifth-largest specialty generics company and the largest drug firm in India.
Daiichi Sankyo said in a statement that it will hold about a 9 percent stake in Sun Pharmaceutical after the deal, which has been agreed to by the boards of both companies.
In a separate statement, Daiichi Sankyo said the U.S. Attorney’s Office in New Jersey had issued an administrative subpoena to Ranbaxy seeking information related to the company’s Toansa plant in India. Ranbaxy is cooperating with the information request.-Reuters