Sun Pharma, Ranbaxy $4 billion merger deal gets US FTC nod

FTC has also accepted a proposed consent agreement pursuant to which Sun Pharma and Ranbaxy have agreed to divest the latter's interests in generic minocycline tablets and capsules to an external third party

Sun Pharma and Ranbaxy have got the nod for their $4 billion merger from US Federal Trade Commission (FTC), which terminated a key waiting period clause, paving way for the two firms to fast-track their deal.

The US FTC has completed its review of the proposed merger deal and granted early termination of waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), Sun Pharmaceutical Industries and Ranbaxy Laboratories said in a joint statement.

"The early termination of the waiting period under the HSR Act satisfies one of the essential conditions to the closing of the Ranbaxy acquisition," it said.

The HSR Act prevents parties from completing mergers or acquisitions until they have made a detailed filing with the FTC and US Department of Justice, which determine whether the transaction will affect US antitrust laws or not.

The two companies further said that FTC has accepted a proposed consent agreement pursuant to which Sun Pharma and Ranbaxy have agreed to divest the latter's interests in generic minocycline tablets and capsules to an external third party.

"Sun Pharma and Ranbaxy are working closely towards completion of the transaction and will comply with the conditions laid down in the FTC consent agreement within the specified time," it added.

Generic minocycline tablets are used to treat a wide array of bacterial infections, including pneumonia, acne, and urinary tract infections.

Under the proposed settlement, Ranbaxy's generic minocycline capsule assets would be acquired by Torrent Pharmaceuticals that markets generic drugs in the US.

The latest development comes more than a month after FTC's Indian counterpart, CCI, directed both the companies to divest seven products as it found that the deal could hit competition in the Indian market.

Last December, CCI had ordered Ranbaxy to divest six products and Sun Pharma to sell one while giving its clearance to the mega deal.

The Indian watchdog had directed Sun Pharma to divest all products containing 'Tamsulosin + Tolterodine' which are, at present, marketed and supplied under brand name Tamlet.

Ranbaxy was asked to sell all products containing Leuprorelin which are marketed and supplied under brand name Eligard.

The company would also have to divest products such as Terlibax, Rosuvas EZ, Olanex F, Raciper L and Triolvance.

The merger deal, once consummated, would create India's largest and world's fifth-biggest drug maker.

The merged entity would have operations in 65 nations, 47 manufacturing facilities across 5 continents, along with a global portfolio of speciality and generic products.

Sun Pharma shares were trading 2.01% up at Rs 934.25 apiece while those of Ranbaxy rose 2.66% at Rs 722.40 per scrip during afternoon session on the BSE.