ISSUES RELATED TO THE MERGER.docx - ISSUES RELATED TO THE MERGER The merger was approved by the Competition Commission of India(CCI Bombay Stock

ISSUES RELATED TO THE MERGER.docx - ISSUES RELATED TO THE...

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ISSUES RELATED TO THE MERGERThe merger was approved by the Competition Commission of India (CCI), Bombay Stock Exchange(BSE), and National Stock Exchange (NSE) but the challenge in the road ahead was to garner 100%compliance of manufacturing standards as laid down by the regulators, achieving the projectedsynergy of $250 million within 3 years and a robust expansion with a focus on R&D.Issues: Sun Pharma faced with in return of the dealRanbaxy plants at Mohali, Dewas and Paonta Sahib faced quality issues which led to the US Food andDrug Administration (FDA) to impose a ban on the drugs being produced in these manufacturingplants. Adding to these issues, Ranbaxy was plagued with problems like mishandling of data andinferior facilities of production leading to a payment of $500 million as settlement with the federallegislation and a further ban on a few generic drugs of Ranbaxy due to manufacturing woes.Post Deal Challenges:a. Expected SynergiesSynergy benefits valuing to $250 million by the third year of the closing of the deal, revenueacceleration and cost management along with supply chain efficiencies were the benefits expected.
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