The Sun Pharmaceuticals-Ranbaxy deal has got the Foreign Investment Promotion Board (FIPB) nod, but the Competition Commission of India is yet to give its view on the merger.
This mega pharma agreement is the first merger deal to face public scrutiny in India.
On Monday, Sun Pharma informed the Bombay Stock Exchange (BSE) that it has got FIPB approval for issuing equity shares of the company to the non-resident investors of Ranbaxy Laboratories.
However, the $4-billion deal is still awaiting a nod from the CCI, which was expected to decide on the matter by the end of November.
Reportedly, the CCI has asked both the companies — Ranbaxy and Sun Pharma — to divest some brands which, when merged, would create a monopoly in the market. The CCI is expected to announce its decision on the matter by December 5.
While CCI Chairman Ashok Chawla could not be reached through calls and messages, Ranbaxy refused to comment on the matter.
According to the terms inked between Ranbaxy and Sun Pharmaceuticals in April, each Ranbaxy shareholder will get 0.8 shares of Sun Pharmaceuticals for every share of Ranbaxy.
The deal, merging Daiichi Sankyo-owned Ranbaxy Labs with Sun Pharma, is likely to create the fifth-largest pharmaceutical company in the world and the largest in India.
In September, the CCI had called for public comments on the deal and said in a statement, “The Commission formed a prima facie opinion that the combination is likely to have an appreciable adverse effect on competition.”