Daiichi Sankyo buys 20 percent stake in Ranbaxy | business | Hindustan Times
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Daiichi Sankyo buys 20 percent stake in Ranbaxy

business Updated: Oct 17, 2008 12:45 IST

Reuters
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Japan's Daiichi Sankyo Co said on Friday it had completed the purchase of 20 per cent in India's Ranbaxy Laboratories, part of its plan to obtain a majority holding in the generic drugmaker.

Japan's third-largest drugmaker also sought to reassure investors about the status of prasugrel, a closely-watched drug it has developed with Eli Lilly and Co, saying it had not been notified of any action by US regulators.

The Food and Drug Administration failed in September to finish its review of prasugrel, the second time it has missed a deadline after failing to meet one in June.

The companies submitted their application in late December and the drug was given priority review status, which normally means a six-month review period.

Daiichi's payment for the 20 per cent stake it obtained from the market had been postponed due to a delay in approval by Indian authorities.

As part of the deal to acquire a stake of at least 50.1 per cent and estimated at $4.6 billion, it also plans to buy an 34.8 per cent holding from Ranbaxy's founding family, as well as new shares.

It paid a total 68.2 billion Indian rupee ($1.4 billion), or 737 rupee per share, for the 20 per cent holding plus interest amounting nearly 1 billion yen due to the payment delay.

Daiichi Sankyo warned earlier this month it could book a valuation loss on its holding of Ranbaxy shares in the year to March.

Ranbaxy shares have lost more than half of their value since June amid a data falsification scandal in the United States. They finished trading on Thursday at 266.35 rupees.

Ranbaxy's chief executive Malvinder Singh said on Tuesday the Indian firm expects to close the takeover deal by Daiichi Sankyo by the end of December.

Daiichi Sankyo shares closed down 4.3 per cent at 1,847 yen, underperforming a 3 per cent rise in Tokyo's pharmaceutical subindex.