India's Sun Pharmaceutical Industries is buying troubled generic drug maker Ranbaxy Laboratories in a $4-billion deal, the companies said Monday.
The combined company will be India's biggest pharmaceutical firm, with annual revenue estimated at $4.2 billion.
Ranbaxy is the leading drug maker in India's $26-billion generic pharmaceutical industry, but it has faced penalties from U.S. regulators for years. The U.S. has banned imports of drugs from two of its factories because of concerns about quality control.
The acquisition will enable Sun Pharma to tap Ranbaxy's global network and manufacturing capabilities. The combined company will have 47 factories across five continents and operations in 65 countries, said Dilip Shanghvi, Sun Pharma's managing director.
"In high-growth emerging markets, it provides a strong platform which is highly complementary to Sun Pharma's strengths," Shanghvi said. "We see tremendous growth opportunities."
Sun Pharma said the transaction value includes $3.2 billion in stock and nearly $800 million of Ranbaxy debt. Ranbaxy shareholders are expected to own 14% of the new company, and Ranbaxy's parent company, Daiichi Sankyo, will be the second-largest single shareholder.
Ranbaxy has annual revenue of about $2 billion.Copyright © 2014, Los Angeles Times