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+,./