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Japanese Pharma Continue Buying Binge

http://www.reuters.com/article/marketsNews/idINT34755720080611

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Daiichi Sankyo to pay up to $4.6B for control of Ranbaxy

Wed Jun 11, 2008 3:10am EDT
By Edwina Gibbs

TOKYO (Reuters) - Japanese drug maker Daiichi Sankyo Co Ltd (4568.T) plans to take majority control of India's biggest drug maker Ranbaxy Laboratories Ltd (RANB.BO) in a friendly deal worth up to $4.6 billion.

The move represents a major foray into the field of generic drugs by Daiichi Sankyo and would be the latest in a string of large overseas acquisitions by Japanese drug makers.

Shares in Daiichi Sankyo, best known for its high blood pressure medication Benicar and the experimental blood thinner prasugrel, ended nearly 5 percent higher on early reports of a deal while Ranbaxy's shares were up 4 percent in afternoon trade.

The deal values Ranbaxy, one of India's biggest firms, at 737 rupees per share and represents a 31.4 percent premium to Tuesday's closing share price.

Under the deal, Daiichi Sankyo will buy the entire 34.8 percent controlling stake of Ranbaxy's founders, the Singh family, and also launch a bid to buy shares from the market.

The total transaction value is expected to be worth between $3.4 billion to $4.6 billion, the companies said in a statement.

"There's a global move to generics and Japan's a bit behind on this," Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, said after reports of the deal.

"India is a large market but even more important is the fact that Ranbaxy operates in a number of other countries. That's the real merit," he said.

Malvinder Singh, chief executive of Ranbaxy, plans to meet the media from 1.30 p.m. in India. (3:30 a.m. EDT)

The deal follows Takeda Pharmaceutical Co Ltd's acquisition of U.S. biotech firm Millennium Pharmaceuticals for more than $8 billion and Eisai Co Ltd's purchase of MGI Pharma Inc for $3.9 billion. Both Millennium and MGI Pharma are strong in cancer medicines.
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