Sun Pharma gains on acquisition of Ranbaxy

Sun Pharmaceutical Industries is trading higher by 2% at Rs 583 after the company announced that it will buy Ranbaxy Laboratories in an all-share deal, creating the world's fifth-largest generic  pharma company.

Ranbaxy Laboratories however, is trading lower by 2.2% at Rs 449 on the .
NSE on profit booking. The stock has rallied 26% in the past week compared to a marginal 0.02% decline in CNX Nifty.

Sun Pharma and Ranbaxy Laboratories said that they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100% of Ranbaxy in an all-stock transaction.

Under these agreements, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy, Sun Pharma said in a press release.

This exchange ratio represents an implied value of Rs 457 for each Ranbaxy share, a premium of 18% to Ranbaxy’s 30-day volume-weighted average share price and a premium of 24.3% to Ranbaxy’s 60-day volume-weighted average share price, in each case, as of the close of business on April 4, 2014.

The company said the combination of Sun Pharma and Ranbaxy creates the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India. The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of specialty and generic products marketed globally, including 629 ANDAs.