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Sun Ranbaxy Case Study

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PROJECT OVERVIEW AND MOTIVATION
Since 2007 the global pharmaceutical scenario has witnessed an increasing number of big ticket deals such as Novartis’ and GlaxoSmithKline’s business swap (worth close to $23 million), Pfizer’s USD 100 billion offer for AstraZeneca, Bayer’s acquisition of Merck’s consumer care business for $14.2 billion (US Dollars) and Valeant’s $47 billion (US Dollars) offer for Allergan. With the growth in the developed markets slowing down, the next major focus is on the emerging markets.

Amongst the emerging markets, the Indian scenario was considered to be very promising. Indian market provides various unique propositions which make it very attractive. These range …show more content…

The combined entity was to be the 5th largest player in the Pharma sector and largest specialty generic company in India, with operations in 65 countries around the world. The deal generated a lot of interest among the industry bigwigs and investors as it happened at a very crucial time for Ranbaxy.
Ranbaxy’s U.S. export dedicated manufacturing facilities in Toansa, Poanta Sahib, Dewas, Mohali had been under the continuous watch of United Stated Food and Drug Administration (U.S. FDA). U.S. FDA’s observation of operational lapses in adhering to the current good manufacturing practices during inspections at these plants resulted in subsequent ban on sale of drugs manufactured by Ranbaxy for export to U.S, which severely dented Ranbaxy’s image worldwide. Ranbaxy eventually pleaded guilty to charges of felony in manufacturing and distribution of certain drugs at these facilities and had to pay a hefty fine of USD 500 million. The deal was a sign of breather for Daiichi Sankyo, the Japanese parent of Ranbaxy which had bought a controlling stake of 63.41% in Ranbaxy in 2008 from the previous owners of Ranbaxy for USD 4.6 billion, only to see its investment reduced to half in a span of just 6 years. Post the deal, Daiichi got a 9.41% stake in Sun …show more content…

In 2008, Daiichi acquired a controlling stake in Ranbaxy for USD 4.6 Billion. However, the value of Daiichi’s investments has halved over the years, as Ranbaxy has not been able to ensure compliance of its factories supplying to the US, with USFDA guidelines. Daiichi Sankyo Company, Limited is the second largest pharmaceutical company in Japan. It achieved JPY 1,148.2 billion in revenue in 2013. Innovative products that have the potential to enhance the lives of millions of people around the world has come to define Daiichi Sankyo. Some of the most important successes include the antihypertensive agent olmesartan (Olmetec®) which was launched in 2002 by Sankyo. It is now available in more than 20 countries around the

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