In one of the biggest buy outs of any Indian company by an MNC, Japanese major Daiichi Sankyo has picked up the promoters – Malvinder Singh and Shivinder Singh's – 34.8% stake at Rs 737 per share in drugmaker Ranbaxy Labarotaries.
This means complete exit of Ranbaxy promoters from the company. However, the senior Singh (Mr Malvinder Singh) is expected to continue to head the management for sometime.
The story was first broken by ET. As ET reported earlier, the Japanese company may buy the promoters' stake at Rs 737 per share or around 30% premium over Ranbaxy's share price of Rs 560.75 on Tuesday. At this share price, the company is valued at around Rs 27,492 crore while the promoters will get around Rs 9,573 crore.
The Japanese major will also make a mandatory open offer, as per the Indian laws, to buy an additional 20% stake in the company. The source added that Daiichi Sankyo plans to hold a controlling 51% stake in the Indian company.
Meanwhile, shares of the company rose to their highest in 3-½ years on Wednesday after the Nikkei business daily said Japan's Daiichi Sankyo wanted to buy more than 50 per cent of the Indian firm in a deal worth up to $3.7 billion. The paper said Daiichi Sankyo was planning to launch a bid worth 300 billion yen to 400 billion yen ($2.8 billion-$3.7 billion) for the stake in India's top drugmaker by sales and an announcement was expected later in the day.
Incidentally, Oscar Investments, a promoter group company, which holds 4.76% in Ranbaxy, has informed the BSE on Tuesday that the company is holding a board meeting tomorrow, “to consider and approve the scheme of demerger of investment & trading business of the company.”
Among all the promoter group companies that hold shares in Ranbaxy, the value of Oscar's holding in the company is the largest after Ranbaxy Holding Company. Malvinder and Shivinder Singh, the promoters of Ranbaxy, own around 35% of the company.
The Japanese company set foot in India by setting up a wholly-owned subsidiary with a investment of Rs 25 crore in India earlier this year. ET had reported on January 5 that the Japanese major plans to set up a full-fledged manufacturing and research operation in the country.
Sankyo, which merged with Daiichi in 2005, has a small joint venture in India. Its 39.9% holding in Unisankyo Company was brought under the merged entity. The remaining 60.1% stake in this venture is held by a group of local promoters led by Jay Soman. The JV manufactures and markets bulk drugs, pro-biotics and few pharmaceutical products.
Incidentally, this comes within two months of the Burman family of Dabur group exiting the pharma business by selling their 67% stake to German major Fresenius Kabi in April.
Source: Economic Times