Ranbaxy stock ends nearly 4% down post Sun Pharma deal

Shares in Ranbaxy Laboratories closed the day down around 4 per cent at Rs 445.20 after Sun Pharmaceutical Industries said it will buy the company in a $3.2 billion all-share deal, creating the world's fifth-largest generic drug maker.  

Ranbaxy shares had surged 32.6 per cent in six consecutive sessions of gains till Friday's close.  

Under terms of the agreed deal, Ranbaxy shareholders will get 0.8 of a Sun Pharmaceutical share for each Ranbaxy share they own.

Daiichi Sankyo said in a statement that it will hold a stake of about 9 per cent in Sun Pharmaceutical after the deal.   

Ranbaxy, India's biggest drugmaker by sales and 63.4 per cent owned by Japan's Daiichi Sankyo Co Ltd, is banned from exporting drug ingredients to the U.S. Sun Pharmaceutical's Karkhadi plant is also barred from shipping products by the U.S. Food and Drug Administration.  

India's pharmaceutical industry, which supplies more than 20 per cent of the world's generic drugs, according to PricewaterhouseCoopers, suffers from a lack of oversight including a severe shortage of regulatory inspectors.  

Daiichi has dispatched personnel and promised to provide the necessary support to resolve lingering quality problems at Ranbaxy, in which it first invested in 2008.  

Daiichi Sankyo said in a statement that it will hold a stake of about 9 per cent in Sun Pharmaceutical after the deal.  

The deal values Ranbaxy shares at Rs 457 apiece, representing an 18 percent premium to their 30-day volume-weighted average share price. Ranbaxy shares rose by nearly a quarter over the previous three sessions to close at Rs 459.55 on Friday.