Sun Pharma, Ranbaxy Laboratories rallies over 3% post CCI nod on deal

NEW DELHI: Sun Pharmaceutical Industries, Ranbaxy Laboratories rose over 3 per cent each in intraday trade on Tuesday, after the Competition Commission of India approved the acquisition of generic drugmaker Ranbaxy by bigger rival Sun Pharma on the condition that the companies divest seven select brands in the Indian drug market.

Reacting to the news, Sun Pharma rose as much as 3.04 per cent, while Ranbaxy Laboratories rallied as much as 3.96 per cent on the Bombay Stock Exchange.

The CCI nod also clears the way for the largest deal in pharmaceutical sector, creating the No. 1 drug company in India with a market share of 9 per cent and the fifth largest generic drug firm globally. Sun agreed to acquire Ranbaxy in April in a $4 billion all-stock deal.

According to a rough calculation by ET, the seven brands indicated in the competition watchdog's order for divestment would be roughly earning about Rs 50 crore for their parent companies annually, implying a negligible impact on the merged company.

Raw data for this was gleaned from last year figures of Aiocd Awacs, a pharma marketing research firm. The brands CCI has identified include Tamlet, Rosuvas EZ, Eligard, Terlibax, Olanex F, Raciper L and Trioolvance, added the report. A company statement noted that these products constitute less than 1% of the combined entity's revenues in India.