Ranbaxy, India’s topmost pharmaceutical company has joined hands with Daiichi Sankyo of Japan. This is one of the biggest deals ever made in the history of India for a whooping $ 4.6 billion (about Rs.19, 000 crore). The CEO and MD term it as a strategic plan rather than merely a ‘sell-out’.
“The deal is a path breaking one combining two very strong companies to create a new global force in pharmaceuticals,” Dr Reddy’s Vice Chairman and CEO GV Prasad said. It is a productive deal as it combines technical, managerial and financial resources into one and it would pave the path for a newer kind of success.
Daiichi is Japan’s second largest drug company and this bonding with Ranbaxy would help them to reach the top ten marks in the $20 million pharmaceutical market. Daiichi Sankyo has operations in 21 countries, and by entering into agreement with Ranbaxy, their presence would increase to 60 countries. Malvinder Singh in a press conference further expressed his views that this decision was not taken in an impulsive manner but is very close to his heart. They have nurtured Ranbaxy as their own baby.
This decision was taken after weighing all possible solutions and they have no regrets. After making such a big budget deal, there are still some controversies surrounding them. Some people say that this strategy was planned in order to clear a debt of $ 600 million. Also, the payment of foreign currency convertible bonds was a burden on their heads.
The financial condition of Ranbaxy was in shackles and they hadn’t tasted success for the last couple of years, the ever-rising competition put them far behind the race and their position in the market seemed to drop lower by the years. These reasons may have played a significant role to make this crucial choice. Post acquisition, Ranbaxy Laboratories would become a debt-free with cash flowing of around Rs.2, 800 crore.
In spite of whatever is being said, such deals have made India look on the brighter side, which is a sign of rapid development. Things are looking up for India and it wouldn’t be long when India would soar higher and touch the skies.
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