Bigger and Better
Experts says Sun Pharma's acquisition of Ranbaxy will be positive for the former's shareholders
Rahul Oberoi/Money Today
Edition:
May 2014
RELATED
Sun Pharma expects Ranbaxy to be profitable in short term
What will it take for Sun Pharma to turn Ranbaxy around?
To increase presence in global and domestic markets,
Sun Pharmaceutical Industries
is buying
Ranbaxy Laboratories
in a shareswap deal. Ranbaxy shareholders will get four shares of Sun
Pharma for every five shares held by them. The exchange ratio represents an implied value of Rs
457 for each Ranbaxy share.
The deal will lead to 16.4% dilution in the equity capital of Sun Pharma. This is because its total
equity value is $3.2 billion and the deal size is $4 billion (valuing Ranbaxy at 2.2 times last 12
months sales). The deal is expected to be completed by December 2014.
Experts say the deal will be good for Sun Pharma. Praful Bohra, senior research analyst, Nirmal
