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Ranbaxy Daiichi

Ranbaxy – Daiichi Sankyo Deal

Akash Bangani Dipika Bhura Gaurav Khetan Neetu Rathod 12065 12077 12082 12118

Plan

• • • • • • • • • • Industry Overview Companies' Profiles Snapshot with the deal Funding the deal Rewards to Daiichi Benefits to Ranbaxy Synergetic effects Post Acquisition challenges New Developments Conclusion

Indian Pharmaceutical drug Industry

• Present scale $14 billion. • Ranks 4th in world in terms of creation and thirteenth in terms of ingestion. • Extremely fragmented. 325 large and medium-scale firms and 26000 small-scale companies. • Could be divided in 2 portions – Formulation and Bulk Drugs Market Share of sectors 20% 80% Formulations Mass Drugs

Porter's 5 pushes

Threat of Entry: AVERAGE

Competition: LARGE

Porter's five forces Model

Threat of substitute: LOW

Bargaining power of customers: MODEST

Bargaining power of suppliers: LOW

Company Profile: Ranbaxy

• Incorporated in 1961. • The biggest pharmaceutical company in India and among the top 100 pharmaceuticals companies on the globe. • Ranked 8th largest generic medicine company on the globe. • Earth operations in 49 countries and making operations in 11 countries. • Exports contribute to about 80% of total income. • 2008-Global Sales individuals $ one particular, 682 Million

Market Reach & structure: Ranbaxy

Shareholding before Deal

Revenue Variation REGION The united states Europe SHARE 26% 23% Category Marketers Domestic Establishments FII's Keeping 34. 8% 23. 3% 18%

India

Emerging Market segments Developed Market segments

21%

54% 40%

Shareholding after Offer Category Daiichi Sankyo Others Holding 64% 36%

Other folks

6%

Regarding Daiichi -- Sankyo

• Established in 2005, following the merger of two leading companies in Japan- Sankyo Company Ltd. & Daiichi Pharmaceutical Business Ltd. • Proprietary researched based pharmaceutical drug company. • Sales Divides: Japan – 68% The united states – twenty percent Europe – 9% Different – 3%

Daiichi – Sankyo (Current Data)

Snapshot of the package

• In June 11, 2008 Daiichi agreed to shell out $4. 6 billion to get acquiring 51% stake in Ranbaxy adding the total organization value of Ranbaxy at $8. your five billion. • Deal auto financing through a mixture of debt and existing cash resources of Daiichi Sankyo. • The purchase price of Rs. 737 symbolizes a premium of above fifty percent to Ranbaxy's average daily closing selling price on the National Stock Exchange. • Deal would make the mixed entity fifteenth largest pharmaceutical company on the globe.

Acquisition of Stocks

Date of Acquisition March 15th 08 Oct twentieth 2008 April 20th 08 Particulars Wide open offer Special Share Promoters No . of Shares 80, 519, 126 46, 258, 063 seventy eight, 913, 234

Nov seventh 2008

Promoters

TOTAL

forty-eight, 020, 900

268, 711, 323

•Issue of arrest warrants which could end up being converted into equity shares among 6 to 18 months.

3000 2980 2960 Stock Price in Yen

Daiichi

twelfth, 2980 eleventh, 2975

2940

2920

16th, 2945 eighteenth, 2935 seventeenth, 2930 thirteenth, 2910

2900 2880 2860

9th, 2850

2840

2820 0 2

10th, 2835

4

6th

8

12

Ranbaxy

610

600 590 580 Share Price 570 560 550 540

twelfth, 543. your five 10th, 560. 75 eleventh, 560. eight 13th, 566. 9 17th, 581. forty-five 16th, 567. 75 eighteenth, 598. 2

530

520 0

ninth, 526. four

2

5

6

almost eight

10

Funding the Deal

• Daiichi was going to finance 50% through bank borrowings. • Less volume of debt in the Balance Sheet was a great advantage for the Co. in securing financial loans to fund the deal. • Staying 50% funded through inside financial resources ▫ Ample fluidity to finance the deal.

Total Retained Earnings= $ twelve. 26 bn Marketable securities = $5. 26 bn Cash = $ 474. 35 mn & Assets = dollar 2 . 16 bn

Since on mar, 2008

Initiating Factors of the Deal

• Changing dynamics of the global pharmaceutical business • Increasing population • Government's raising focus on Health care. • Us patents reaching termination • Changing consumer styles • Change in Obvious Act, june 2006

Patent Termination worldwide

What Daiichi gets from the offer

• Promoters' 34. 8% stake and total of...

03.09.2019

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