India’s regulator approves Sun Pharma’s acquisition of Ranbaxy, but with conditions

The Indian Competition Commission has granted domestic generics company Sun Pharmaceutical Industries (BSE: 524715) clearance to acquire fellow Indian drug maker Ranbaxy Laboratories (BSE: 500359), if the companies divest seven of their products.

India's Business Standard noted that the seven drugs account for less than 1% of sales of both the companies, but enjoyed a market share of 90%-95%. Both companies have said they will comply. It added that Sun Pharma and Ranbaxy will divest products worth 1,370 million rupees (540 million rupees from Ranbaxy and 830 million rupees from Sun Pharmaceuticals) within six months. The deal will make Sun Pharma the largest drug maker in India and the fifth largest global generics company.

Sun Pharma managing director Dilip Shanghvi said: “The order of the CCI approving the deal is an important milestone for the transaction. It revalidates our view that businesses of Sun Pharma and Ranbaxy complement each other with limited product overlap, and will offer a comprehensive product basket to enable future growth. We are pleased with the open and transparent manner in which the matter has progressed.”