CCI Approves the Proposed Merger Between Sun Pharma and Ranbaxy
Mumbai and Gurgaon, India: Sun Pharmaceutical Industries Ltd. (Reuters: SUN.BO, Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715) and Ranbaxy Laboratories Ltd (Reuters: RANB.BO, Bloomberg: RBXY IN, NSE: RANBAXY, BSE: 500359) today announced that they have received the order of the Competition Commission of India (“CCI”) dated December 5, 2014 (“Order”) by which CCI has approved the acquisition of Ranbaxy by Sun Pharma, subject to compliance with certain conditions.
Sun Pharma and Ranbaxy had filed the notice with the CCI on 6th May 2014 and sought its approval with respect to the deal. Over the past few months, the CCI has sought information and detailed clarifications for the purposes of making its assessment. One of the preconditions of the Order is that parties procure the divestment of seven products. These products constitute less than 1% of the combined entity's revenues in India.
Dilip Shanghvi, Managing Director of Sun Pharma said, “The Order of the CCI approving the deal is an important milestone for the transaction. It revalidates our view that the Sun Pharma and Ranbaxy businesses complement each other with limited product overlap, and will offer a comprehensive product basket to enable future growth. We are pleased with the open and transparent manner in which the matter has progressed.”
Arun Sawhney, CEO & Managing Director of Ranbaxy said, “The approval by CCI is a significant step forward. We are confident that post closure, the combined entity will enable sustainable long term growth and deliver immense value for all stakeholders.” Sun Pharma and Ranbaxy are looking forward to progressing towards the completion of the transaction and will comply with the conditions laid down by the CCI within the specified time.
The Competition Commission of India (Commission) in its meeting held on 5th December, 2014 (05.12.2014) approved the proposed merger between Sun Pharma and Ranbaxy, subject to the parties inter alia carrying out the divestiture of their products relating to seven relevant markets for formulations. Further, the Commission also directed that the proposed merger shall not take effect before the parties have carried-out the divestiture of the products so specified as per the order of the Commission.
Earlier on 6th May, 2014(06.05.2014), the Commission had received a notice from Sun Pharmaceuticals Industries Limited (Sun Pharma) and Ranbaxy Laboratories Limited (Ranbaxy) in relation to the merger of Ranbaxy into Sun Pharma.
On the basis of combined market share of the parties, incremental market share as a result of the proposed combination, market share of the competitors, number of significant players in the relevant market etc., the Commission focussed its investigation on some relevant markets for formulations where the proposed combination was likely to have an appreciable adverse effect on competition in the relevant market in India.
In addition to these relevant markets, the Commission also investigated two pipeline products of Ranbaxy and possibility of any vertical foreclosure in the market for active pharmaceutical ingredients (APIs).
On the basis of the replies submitted by the parties, the Commission after having considered the same decided that the adverse effect of the proposed combination on competition can be eliminated by suitable modification under the provisions of the Competition Act, 2002.
Accordingly, the Commission in its meeting held on 05.12.2014 approved the proposed merger between Sun Pharma and Ranbaxy, subject to the parties inter alia carrying out the divestiture of their products relating to seven relevant markets for formulations. Further, the Commission also directed that the proposed merger shall not take effect before the parties have carried out the divestiture of the products so specified as per the order of the Commission.
For more details, please visit http://www.cci.gov.in/May2011/OrderOfCommission/CombinationOrders/C-2014-05-170.pdf
The Prime Minister, Shri Narendra Modi, today dedicated to the nation, the Vadodara City Command …