Rising Sun

The takeover of Daiichi Sankyo-owned Ranbaxy, India’s largest pharmaceutical firm, by Sun Pharma in an all-stock deal worth nearly $4 billion is not only the largest deal in pharma in Asia but has catapulted Sun Pharma to becoming the world’s fifth largest generic drugmaker, with an enviable portfolio. It’s a position Sun’s billionaire promoter Dilip Shanghvi, who is passionate and well-versed in therapeutics, rightly deserves for his perseverance and golden touch. Each one of his previous takeovers of stressed assets has been turned around successfully.

His acquisition of Taro Pharmaceuticals of Israel was one of the most fiercely-fought takeovers as there was tremendous resistance from Taro shareholders against his assuming control. But Mr Shanghvi was resolute and won it after a long-drawn battle. Ranbaxy, a celebrated brand, is an enviable acquisition for any company as it brings with it strong footprints in the US, Europe and emerging markets. However Daiichi, the erstwhile owners, could not handle the complexities of Ranbaxy, according to those in the know in the industry. Several bans were imposed on different manufacturing facilities of Ranbaxy in India by the US FDA. The last straw could have been the $500 million it paid as fines.

It will now be one of the largest shareholders in Sun Pharma, with the Ranbaxy brand going into the sunset, according to some. But the takeover of this valuable brand by Sun, an Indian company, is good news for all who want to keep this country’s pharmaceutical industry “Indian”.