Daiichi exits Sun; ends 7 years of tumultuous ride in India

Japanese drug maker Daiichi Sankyo today sold its entire stake of around 9 per cent in Sun Pharmaceutical Industries for over Rs 20,420 crore, which it received after merger of Ranbaxy in the Indian firm, ending its seven years of tumultuous experience in the country.
The company, which had forayed into the growing Indian pharmaceutical market by buying a majority stake in Ranbaxy Laboratories in 2008 for Rs 22,000 crore, sold over 21 crore shares in Sun Pharma.
In a statement issued today Daiichi said "the sale of Sun Pharma shares has been completed." As part of the share sale, the Japanese firm sold a total of 21,49,69,058 shares of Sun Pharma.

At the average share price of about Rs 950 in the morning trade when Daiichi announced selling its stake, the value of its shares is estimated to be Rs 20,420 crore.
Last month, Sun Pharma had announced completion of merger of Ranbaxy with itself, almost a year after announcing the USD 4-billion deal.
As part of the deal, Ranbaxy shareholders were to receive 0.8 Sun Pharma shares for every Ranbaxy share they held. Daiichi held 63.4 per cent in the Gurgaon-based firm at the time of the merger.

The merger with Ranbaxy has fortified Sun Pharma's position as the world's fifth largest specialty generic pharma firm and the top-ranking domestic one with a significant lead in the market share.

The Japanese firm faced numerous challenges in its seven year long stint in India as the firm it bought -- Ranbaxy -- came under the scanner of US health regulator for gross violation of approved manufacturing norms.
In 2008 itself, the US Food and Drug Administration banned 30 generic drugs produced by Ranbaxy at its Dewas (Madhya Pradesh) and Paonta Sahib and Batamandi unit in Himachal Pradesh, citing gross violation of approved manufacturing norms.
In the same year, the US Department of Justice had moved a motion against the company in a local court alleging forgery of documents and fraudulent practice.

Ranbaxy had in December 2011 set aside USD 500 million in anticipation of settlement agreement.
Eventually, in 2013 Ranbaxy pleaded guilty to "felony charges" relating to manufacture and distribution of certain adulterated drugs made at two India units and agreed to pay USD 500 million -- the largest settlement by a generic medicine maker till date.
It led to Daiichi Sankyo revising its earnings forecast, and had to also enforce salary cuts for its directors. The Japanese firm had alleged that certain former shareholders of Ranbaxy had "concealed and misrepresented critical information concerning the US Department of Justice and the FDA investigations".