Ranbaxy, Sun Pharma gain as CCI clears deal

Shares of Ranbaxy Lab and Sun Pharma on Tuesday gained as much as 4 per cent after the drug-makers got fair trade watchdog CCI's approval for their long-pending  $4-billion merger, though with riders.

Ranbaxy Lab's stock rose 4 per cent to Rs 650.7 at the BSE. Similarly, shares of Sun Pharma jumped 3 per cent to Rs 854.

Sun Pharma and Ranbaxy yesterday got CCI's approval for their long-pending $4-billion merger, but with a condition that they will have to modify the deal by divesting seven key products to address monopoly concerns.

The regulator, which has ordered Ranbaxy to sell six products and Sun to divest one, will also appoint a monitoring committee to oversee compliance to the conditions put forth by it to ensure the merger does not hit competition.

The approval comes within days of clearance from the Foreign Investment Promotion Board (FIPB).

The deal that was announced in April would create India's largest and world's fifth biggest drug-maker.

In its order dated December 5 and made public yesterday, the CCI said it "approves the proposed combination... subject to the parties carrying out the modification to the proposed combination".