Ranbaxy family sells stake to Daiichi

This surely has to be the most closely guarded and shocking news in the industry this year. The Singhs have really stuck gold with this deal. A lot of the money generated out this deal will be pumped into Fortis Healthcare and Religare Financial Services. Only time will tell if Malvinder Singh has pulled off a coup or it’s a decision he will live to regret.

The Indian promoters of Ranbaxy, the Singh family, have agreed to sell their stake to Daiichi Sankyo Company Ltd of Japan in one of the largest deals in the Indian pharmaceutical space.

The all-cash deal is valued at $4.6 billion (Rs 19,780 crore) which will see Daiichi acquiring 51 per cent in Ranbaxy, India’s largest domestic drug company, at Rs 737 a share, a 53.5 per cent premium to the average daily closing price on the National Stock Exchange for three months ending June 10, 2008, and 31.4 per cent to the June 10 closing price.

This price puts Ranbaxy’s enterprise value at $8.5 billion.

Full article here

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  • Chittaranjan

    Just yesterday night I read the Reuters report abt Daiichi showing interest in Ranbaxy and overnight, the deal was done!

    BW used to have lot of articles abt. Ranbaxy but ever since my subscription expired, I haven’t been up to date with the mkts as such! Anyways, thats beside the point.

    Malvinder Singh & family are said to make a cool 15,000 crore! Thats gotta be one neat sale 😎

  • Sachin

    gosh from 2.5 lacs to $ 2 Billion ………… cool stuff……… capitalism at its best……………last year it was more of a one way street Indians where acquiring business all over the world…….. now i guess it is becoming both ways ……….

  • Quirky Indian

    I think he’s pulled off a coup. In any case, even if he lives to regret it, he has a lot of money to keep him company!

  • dinu

    I couldn’t believe this one actually…. Ranbaxy is doing really good these days right ? then why did they do this ?

  • Liju Philip

    @Chittaranjan, i had absolutely no inkling of the deal. Btw, i read at least 5-6 business websites / papers daily. It was clearly a shocker for me. Its interesting to see that a founder family is willing to sell off all the stake and become a professional. I had almost planned to buy a few shares in the company last month. Something else cropped up and i backed out.

    @Sachin, oh yeah that’s been a phenomenal growth for Ranbaxy. Thanks, it’s a good article.

    @QI, true, 10k crores is hell lot of a money to regret 😉

    @Dinu, the company is doing well now, but the future is quite hazy. Ranbaxy was fighting a lot of court cases against the generic drugs it was creating. Also maybe they felt the company has reached a plateau and needed a bigger company to propel them to the next level of growth.

  • Chittaranjan

    There were also reports that Glaxo and Pfizer were interested in Ranbaxy. BTW, the deal is said to be the ‘second largest foreign acquisition of an Indian co.’. Which is the largest, do u have any idea?

    P.S: there are reports that DC may sell off a stake to NYT!

  • Liju Philip

    Heard that Pfizer is going to make a hostile bid for Ranbaxy. Some discussion about the same by Udayan Mukherjee in CNBC yesterday.

    The largest acquisition is Vodafone buying Hutch for $11 billion (if iam not wrong).

    Oh wow, the DC news is indeed news. Ya, DC needs some fresh investments and some variety in their news. Btw, have you read their new finance paper? http://www.mydigitalfc.com Its pretty good. Btw, i love http://www.livemint.com too. Its from Wall Street Journal.

  • Chittaranjan

    Mydigitalfc sounds like a football Club…u know…chelseafc, liverpoolfc… 😐

    I hate the layout of LiveMint 👿 The sidebars are sooo big that the article gets squeezed in vertically! And why can’t they make their titles smaller! I usually hop over to ‘Lounge’ 😳

  • Liju Philip

    The main grouse with livemint is that if an article runs into 3-4 pages, i cant go to the next page. Clicking on next page takes me to the next article.

    Its frustrating sometimes. Oh ya, Lounge is pretty good. And Vir Sanghvi’s articles are good too.

  • Liju Philip

    abhi change kiya with specific page nos. earlier, it used to be next page and no matter what you click, it takes me to the next article instead of the next page of the current article.

    looks like they have sorted it out. Btw, yest there was a long article on Mukesh Ambani.