Mergers &

Acquisitions:
Sun Pharma-
Ranbaxy Deal
Merger & Acquisition

Amergeris a legal consolidation of two companies into one

entity

Merger is done by ofering the stockholders of one company

securities in the acquiring company in exchange for the
surrender of their stock.

Anacquisitionoccurs when one company takes over another

and completely establishes itself as the new owner.

Target company still exists as an independent legal entity

controlled by the acquirer.

Acquisitions are often made as part of a companys growth

strategy whereby it is more bene!cial to take over an existing
!rms operations and niche compared to expanding on its
own.

"ften paid in cash# the acquiring companys stock or a

combination of both
Some famous M & As
Diference between
merger an acquisition
Merger Acquisition
Two companies $often of same
si%e& decide to move forward
as a single new company
"ne company takes over
another and establishes itself
as the new owner of the
business
'tocks of both the companies
are surrendered# while new
stocks are issued afresh
(uyer company )swallows*
the business of the target
company
+xample# ,laxo -ellcome and
'mith.line (eehcam ceased to
exist and merged to become a
new company# known as ,laxo
'mith.line
+xample# /r. 0eddys 1abs
acquired (etapharm through
an agreement amounting 2345
million
Synergies of M&A

+conomies of 'cale

Acquiring new technology

6mproved market reach and industry visibility

'taf amalgamation
!actors leaing to
mergers
"nternal !actors #xternal !actors
7unds8capital 9ompetition
-orking capital Monopolistic
Time and resource
management
0each global market
Managerial e:ciency Technology
1arge scale Advertisement and promotion
6ncrease in turnover and
revenue
'ynergy
$y%es of Merger
;ori%ontal Merger
<ertical Merger
9ongeneric Merger
0everse Merger Market +xtension
Merger
9onglomerate
Merger
$y%es of Merger
Sun Pharma
acquires Ranbaxy
6n the making=
Sun Pharma

6ncorporated in >4?@# went public in >44A

7ounded by /ilip 'anghvi

(iggest 6ndian drug maker by valuation

Market presence in A3 countries

Turnover of 0s >B#CCA 9rore $March ending DC>@&

>Ath acquistion of 'un since >445

Ranbaxy

Multinational Eharma 9ompany

6ncorporated in >4B># went public in >45@

-ide range of generic medicines

DCC?F /aiichi 'ankyo acquired @A.?G stake

+xports to A@ counties# Manufacturing facilities in ?

Turnover of 0s >D#A>C.A@ 9rores $March ending DC>@&

&ighlights of Deal

/eal announced on 5th April DC>A

<alued at approximately 2 A (illion

0anbaxy share holders to get A shares of 'un for every 3

shares of 0anbaxy

/aiichi 'ankyo to become second largest stakeholder in

'un

2D3C Million revenues and operational synergy

Sun Pharma' Ranbaxy:
Pro(le of the new mar)et
leaer

'unH0anbaxy 6ndias largest Eharma company

3th largest global speciality Eharma company

Io. > 6ndian Eharma company in J'

6ncreased presence in emerging markets like 0ussia#

0omania# 'A# (ra%il

Merged entity to have footprints across 33 markets

'trengthened global footprint

&ow will acquisition hel% Sun

Pharma
&ow will acquisition hel% Sun
Pharma
9omplementary Therapeutic share

6ndia (road and complementary branded presence

9ombined entityF @> brands in top @CC

Minimal overlap of brands

+nhances rural reach

+xtensive market product basket

"pportunities to leverage market presence to cross sell

'trong /octor relationships

&ow will acquisition hel% Sun
Pharma
*hallenges in front of Sun
Pharma

Kustifying valuation as it !xes 0anbaxy

/ealing with J'7/A issue of 0anbaxy

Jnforeseen legal liabilities

Eeople related issues

*urrent status of the eal

('+8I'+ approvalH/one L D> Kuly# DC>A

9ompetition 9ommission of 6ndia $996&H "n ;old

Approval of various 6ndian courtsH To be done

'hareholder and creditors clearanceH 9ake walk

Anticipated closure of deal by DC>A

$&A+,
-./