New Delhi, June 11
Under the deal structure that would create the 15th biggest drugmaker globally, the Japanese firm would acquire the entire 34.82 per cent stake in the Gurgaon-based firm from its current promoters Malvinder Singh and family.
Besides, Daiichi would also make an open offer for an additional 20 per cent stake in Ranbaxy at a price of Rs 737 per share which represents a premium of over 50 per cent on the average price over the last three months.
Post this offer, the deal would value Ranbaxy at about $8.5 billion (over Rs 36,000 crore). The purchase of shares from the promoters and through the open offer is expected to value the deal between $3.4-4.6 billion, the two firms said in a joint statement.
Even as Malvinder Singh would continue as CEO and managing director of the entity, which would retain its Ranbaxy brand, the family would net in about Rs 10,000 crore by selling their stake.
Singh would also assume the position of chairman of the board upon the deal's closure that is expected by March 2009.
Besides the promoters' 34.8 per cent stake, Daiichi would also get about 9 per cent through issue of preferential allotment of shares and some warrants, which could be later converted into another 4.5 per cent holding. These, along with a minimum 8 per cent that the new promoters wish to acquire through the open offer, would take Daiichi's holding to above 50 per cent.
Post acquisition, Ranbaxy would become a debt-free firm with a cash surplus of around Rs 2,800 crore.
The two firms said they plan to keep Ranbaxy a listed entity in India. The combined marketcapitalisation of both companies would be around $30 billion making it the world's 15th largest pharmaceutical company.
A binding share purchase and share subscription agreement was entered into by Daiichi Sankyo, Ranbaxy and the Singh family, Ranbaxy said.
"As the company moves into a next level of growth it would benefit the organisation, its shareholders and the employees," Ranbaxy CEO and managing director Malvinder Mohan Singh told reporters while adding," Now it is a clear opportunity ahead of us to leverage from each others' strengths.
The proposed open offer price of Rs 737 represents a premium of 53.5 per cent to Ranbaxy's average daily closing price on the NSE for the three months ending June 10, 2008.
Besides, the offer price is 31.4 per cent higher than yesterday's closing price, Ranbaxy said.
"Malvinder Singh will continue to lead the company as its CEO and managing director, while additionally assuming the position of chairman of the Board," Daiichi Sankyo president and CEO Takashi Shoda said.
The Japanese firm said there would be 10 members in the board and Ranbaxy would appoint four members, including Malvinder Singh, while the rest of the members would be from Daiichi Sankyo.
"Daiichi Sankyo has operations in 21 countries and by entering into agreement with Ranbaxy, we will have presence in now 60 countries globally," Shoda said. — PTI
New Delhi, June 11