Drugmaker Sun Pharma is engaged in discussions with anti-competition authorities in India to get the final go-ahead for its proposed $4-billion acquisition of Ranbaxy.
The process of getting approvals from the Competition Commission of India and the United States’ Federal Trade Commission are ongoing, Sun Managing Director Dilip Shanghvi told analysts on Wednesday morning.
Responding to analyst queries on possible concerns being raised by anti-competition authorities on whether the combined Sun and Ranbaxy operation could lead to a monopoly in the marketplace that could go against consumers, the Sun management said they were in discussions to allay those concerns.
They did not comment on whether competition authorities may ask the two companies to shed some products. Meanwhile, Shanghvi said, Ranbaxy continues to be run by its existing management, and Sun has initiated the internal process of integration so as to have a combined strategy moving ahead.
In April 2014 Sun Pharma had proposed the acquisition of Ranbaxy Laboratories Ltd in an all-stock deal. Sun has got its clearances from the stock exchanges in India and from anti-competition authorities in all applicable markets excluding India and the US, the company said. The transaction also needs to get the go-ahead from shareholders of both the companies.
Financial performance
In its board meeting on Tuesday, Sun said its performance was as expected. “While we are intensively planning for integration with Ranbaxy, we remain focused on strengthening our existing businesses and developing a differentiated and specialty-driven product basket. We also continue to review opportunities to expand and strengthen our global footprint,” a statement quoting Shanghvi said.
Sun Pharma clocked a net profit of Rs 1,391 crores for the three months ended June 30, 2014, compared to a net loss of Rs 1,276 crore in the same period, the previous year. The loss in the first quarter last year was because the company set aside Rs 2,517 crore towards a settlement on a patent infringement litigation in the US involving the sale of generically similar versions of ‘Protonix’, used to treat gastro-intestinal ulcers and hyperacidity. Sun’s income from operations in the quarter under review stood at Rs 3,927 crore, up 13 per cent over revenues clocked in the same quarter last year.