Merger Acquisition-Sun Pharma Ranbaxy

8/11/2019 Merger Acquisition-Sun Pharma Ranbaxy

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Mergers &

Acquisitions:Sun Pharma-Ranbaxy Deal


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Merger & Acquisition

A mergeris a legal consolidation of two companies into oneentity Merger is done by oering the stockholders of one company

securities in the acquiring company in exchange for thesurrender of their stock.

An acquisitionoccurs when one company takes over anotherand completely establishes itself as the new owner.

Target company still exists as an independent legal entitycontrolled by the acquirer.

Acquisitions are often made as part of a companys growthstrategy whereby it is more bene!cial to take over an existing!rms operations and niche compared to expanding on itsown.

"ften paid in cash# the acquiring companys stock or acombination of both


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Some famous M & As


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Dierence betweenmerger an acquisition

Merger Acquisition

Two companies $often of samesi%e& decide to move forwardas a single new company

"ne company takes overanother and establishes itselfas the new owner of thebusiness

'tocks of both the companiesare surrendered# while newstocks are issued afresh

(uyer company )swallows*the business of the targetcompany

+xample# ,laxo -ellcome and'mithline (eehcam ceased to

exist and merged to become anew company# known as ,laxo'mithline

+xample# /r. 0eddys 1absacquired (etapharm through

an agreement amounting 2345million


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Synergies of M&A

+conomies of 'cale Acquiring new technology 6mproved market reach and industry visibility 'ta amalgamation


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!actors leaing tomergers

"nternal !actors #xternal !actors

7unds8capital 9ompetition

-orking capital Monopolistic

Time and resourcemanagement

0each global market

Managerial e:ciency Technology

1arge scale Advertisement and promotion

6ncrease in turnover andrevenue

'ynergy


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$y%es of Merger

;ori%ontal Merger


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0everse Merger Market +xtensionMerger

9onglomerateMerger

$y%es of Merger


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Sun Pharmaacquires Ranbaxy

6n the making=


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Sun Pharma

6ncorporated in >4?@# went public in >44

7ounded by /ilip 'anghvi

(iggest 6ndian drug maker by valuation

Market presence in 3 countries

Turnover of 0s >B#CC 9rore $March ending DC>@&

>th acquistion of 'un since >445


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Ranbaxy

Multinational Eharma 9ompany

6ncorporated in >4B># went public in >45@

-ide range of generic medicines

DCC?F /aiichi 'ankyo acquired @.?G stake

+xports to @ counties# Manufacturing facilities in ?

Turnover of 0s >D#>C.@ 9rores $March ending DC>@&


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ighlights of Deal

/eal announced on 5th April DC>


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Sun Pharma' Ranbaxy:Pro(le of the new mar)etleaer

'unH0anbaxy 6ndias largest Eharma company

3th largest global speciality Eharma company

Io. > 6ndian Eharma company in J'

6ncreased presence in emerging markets like 0ussia#0omania# 'A# (ra%il

Merged entity to have footprints across 33 markets


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'trengthened global footprint

Pharma


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Pharma

9omplementary Therapeutic share


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6ndia (road and complementary branded presence 9ombined entityF @> brands in top @CC Minimal overlap of brands +nhances rural reach

+xtensive market product basket

"pportunities to leverage market presence to cross sell

'trong /octor relationships

Pharma


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*hallenges in front of SunPharma

Kustifying valuation as it !xes 0anbaxy

/ealing with J'7/A issue of 0anbaxy

Jnforeseen legal liabilities

Eeople related issues


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*urrent status of the eal

('+8I'+ approvalH/one L D> Kuly# DC>

9ompetition 9ommission of 6ndia $996&H "n ;old

Approval of various 6ndian courtsH To be done

'hareholder and creditors clearanceH 9ake walk

Anticipated closure of deal by DC>


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$A+,./

Documents

Merger Acquisition-Sun Pharma Ranbaxy