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Contents
1.Introduction 1.About the Companies
1.Acquisition
1.Reasons behind Acquisition 1.Advantages and Outcome 1.Effect on Stock Market 2.Conclusion
Acquisition
Is the buying of one company (the target) by another
Advantages of Acquisition
Increase in sales/revenues Profitability of target company Increase market share Reduction of overcapacity in the industry Enlarge brand portfolio (e.g. L'Oral's takeover of Bodyshop)
Disadvantages of Acquisition
Reduced competition and choice for consumers in oligopoly markets (Bad for consumers, although this is good for the companies involved in the takeover) Likelihood of job cuts Cultural integration/conflict with new management Hidden liabilities of target entity The monetary cost to the company
About Ranbaxy
About Ranbaxy
Integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines Serving in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 11 countries Ranbaxy Laboratories went public in 1973 The CEO of the company is Mr. Atul Sobti after Mr. Malvinder Mohan Singh has stepped down in May 2009
September 1999 - Ranbaxy out-licensed its first oncea-day formulation to a multinational company
June 23, 2006 received from the U.S. Food and Drug Administration a 180-day exclusivity period to sell simvastatin (Zocor) in the U.S. as a generic drug at 80 mg strength
Ranbaxy Acquisition
Ranbaxy Acquisition
Ranbaxy is a well known name in pharmaceutical company in India, with large amount of shares both in Bombay and National stock exchange has now sold major amount of shares to the Japanese company Daiichi
Daiichi Sankyo bought out the entire promoter stake of 35 per cent in Ranbaxy Laboratories at Rs 737 per share costing $3.4 billion to $4.6 billion Daiichi Sankyo will hold a majority stake in Ranbaxy, however Ranbaxy will continue to operate as an independent & autonomous Company.
Ranbaxy Acquisition
All management and people structures across Ranbaxy were continue as they were. Mr. Malvinder Singh was appointed Chairman of the Board of Directors &member of the Senior Global Management of Daiichi Sankyo ,in addition to his existing responsibilities as CEO & MD, Ranbaxy. Currently the CEO of the company is Mr. Atul Sobti from May 2009 onwards.
Ranbaxy Acquisition
Ranbaxy Acquisition
Financial Highlights:BSE
Performance Chart
Financials: Charting
Recent progress
13% rise in annual sales, helped by a strong contribution from Ranbaxy Laboratories Ltd, Indias largest drug maker by revenue, which it bought two years ago. Daiichis sales increased by 16% in the US and by 28.2% in Europe. In India, revenue rose 292.8% to 59.9 billion, mainly on Ranbaxys sales. Ranbaxy posted a net profit of Rs 963 crore for the quarter ended 31 March, against a loss of Rs761 crore a year ago.
Sales had improved 60% to Rs2,490 crore, as the firm for the first time sold medicines in excess of $500 million (Rs2,255 crore) in a quarter.
Zenotech surged 20 per cent Religare (8.53 per cent) Fortis Financial Services (10 per cent) Fortis Healthcare (18.87 per cent) Krebs Biochemicals (4.92 per cent) Jupiter Biochemicals (13 per cent) Orchid increased by 13.56 per cent.
Conclusion
The deal is a win-win for both Ranbaxy and Daiichi. For Daiichi, it was important to have some kind of generic play that Novartis has with Sandoz, which is the second largest generic company in the world. Novartis is a USD 30-35 billion company. Maybe Daiichi at the very start of that graph is trying to do exactly that. They have a great play in Ranbaxy, which has a manufacturing and research base. It will also
References
www.ranbaxy.com www.indiamarks.com www.moneycontrol.com www.ndtvprofit.com www.daiichisankyo.com
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