In one stroke Sun Pharmaceuticals has doubled its size in a cashless transaction by acquiring one of India’s largest pharmaceutical company – Ranbaxy. Having a consolidated turnover of Rs 11,326.32 crore (March ending 2013), Sun Pharma acquired a larger company Ranbaxy with a turnover of Rs 12,410.43 crore (March ending 2013). The transaction done at a valuation of 2.2 times sales of Ranbaxy will make Sun Pharma the largest Indian pharmaceutical company by a wide margin. Sun Pharma took more than 30 years to achieve (inception in 1983) its present turnover and a single day to achieve the same turnover through this acquisition. The beauty of the transaction lies in the fact that a bigger sized company has been acquired without paying anything for it (in absolute rupee terms). The deal is a cashless share swap one where Ranbaxy shareholders get 80 shares of Sun Pharma for every 100 shares they own. ALSO READ: Sun Pharma to acquire Ranbaxy in $3.2 bn dealEven though Sun Pharma is smaller than Ranbaxy in terms of sales, market values the company muchhigher than Ranbaxy. Sun Pharma is valued in the market at Rs 122,128 crore while Ranbaxy attracts a valuation of only Rs 19,070 crore. Ranbaxy’s trouble with US FDA has affected its valuation and operations severely. Over the trailing four quarters, Sun Pharma has overshot Ranbaxy posting a
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Daiichi Sankyo, Sun Pharma, Ranbaxy Laboratories, Sun Pharmaceuticals