Daiichi Sankyo Acquires Majority Stake In Ranbaxy
By Kamla Bhatt • Jun 12th, 2008Category: Entrepreneur Interviews, Ideas, India, Merger & Acquisition, YouTube Videos
Japanese pharmaceutical company Daiichi Sankyo has acquired a majority stake in Ranbaxy, India’s largest drug making firm. Under the agreement Daiichi will acquire the Singh family’s 34.8% stake at 737 rupees ($17.19) each writes The Wall Street Journal.
About 90 percent of Ranbaxy’s sales come from its generic drugs and Daiichi is looking to expand its presence in the generic drug space and catapult the combined entity of Daiichi and Ranbaxy to the 15th place in the world writes The Hindustan Times.
Ranbaxy has a strong pipeline of generic drugs for treatment of gastrointestinal, cardiovascular, diabetes disorders along with HIV/AIDS. The company was founded in 1961 and in the last few years focused on global expansion of its manufacturing and sales operations.
What might have prompted Daiichi’s decision to buy a majority stake in Ranbaxy? For one the market for generic drugs is growing twice as fast as branded drugs and in the past year quite a few Japanese firms have spent money acquiring generic pharma companies writes Seeking Alpha.
Malvinder Singh, CEO of Ranbaxy, who will remain as the head of the new combined entity points out that this model is going to be the way according to his interview with Mint.
Going forward could this be the model for pharmaceutical companies? Could branded pharma companies look for growth by acquiring generic drug makers? In the past few years branded drug companies have been hit hard by generic drug makers. Could the impending health reforms combined with the steep price of medications also influence pharma companies to go this route?
Keep an eye out for Dr. Reddy’s Lab, another generic drug maker that was founded in 1984 but has grown at a phenomenal clip.
Technorati tags: daiichi sankyo, ranbaxy, malvinder singh, generic drugs, india merger and acquisition, ideas, healthcare
Kamla Bhatt is the host and producer of an Internet Radio show where listeners can find stories about the new and emerging India and the global Indian community. As a pioneer of 'internet radio' format in India Kamla started her first show News about India, followed by TalkNewsIndia in 2005. In 2006 she premiered her new show: The Kamla Bhatt Show: Life, People and Ideas. 
