Ranbaxy promoters sell stake off-market to Daiichi Sankyo

Singh family has to pay transaction tax of Rs 1,000 cr.

Our Bureau

New Delhi, Oct. 20 Putting to rest all speculation on the status of its deal with Daiichi Sankyo, Ranbaxy Laboratories Ltd on Monday announced that the Japanese pharma company has acquired 52.5 per cent of the company.

This includes the 22 per cent acquired from the Singh family in an off-market deal, 20 per cent bought earlier through the open offer, and balance by allotment of shares through preferential basis. The entire deal will be completed after Daiichi Sankyo acquires another 12 per cent stake held by the Singh family over the next few days, which will take its total share holding in Ranbaxy to about 64 per cent.

The deal with the promoters had to be taken off-market after the Securities and Exchange Board of India declined permission to carry out the stake sale through stock exchanges. "We today partly sold our stake to Daiichi Sankyo. The entire promoter stake selling will take place off-market," Mr Malvinder Mohan Singh, CEO and MD, Ranbaxy, told Business Line.

He also said that the Singh family will pay the applicable transaction tax as a result of doing the deal off-market. He did not quantify the outgo as a result of the tax payment, but according to estimates the Singh family will have to pay over Rs 1,000 crore to the Government.

Daiichi Sankyo has now acquired 22 crore shares in Ranbaxy including 9.2 crore through open offer, 4.6 crore shares through preferential route and 8.2 crore shares from the promoters. Ranbaxy has received through the preferential issue of equity shares and warrants an amount of Rs 3,585 crores ($ 736 million) from Daiichi Sankyo. The entire deal, announced in June, is valued up to $4.6 billion.

"The substantial cash being infused by Daiichi Sankyo at this stage will be used to expand our business aggressively through the organic and inorganic routes while significantly strengthening our balance sheet, making it leveragable for newer initiatives," Mr Singh said. With this, Ranbaxy has become a subsidiary of Daiichi Sankyo.

Mr Takashi Shoda, President & CEO of Daiichi Sankyo, said, "We are delighted to announce the realisation of the global alliance with Ranbaxy. Two strong presences in innovation and the fast growing business of non-proprietary pharmaceuticals united, this hybrid business model will boost Daiichi Sankyo to achieve our goal to become a world-class pharmaceutical innovator, a Global Pharma Innovator."