 "Sun Pharma, Ranbaxy gain on CCI approval of merger")
Shares of Drug majors Sun Pharma and Ranbaxy Labs are up 1% and 3% respectively on the BSE after the Competition Commission of India (CCI) approved the proposed merger between the abovementioned companies, which will result in a combined entity with annual sales worth $4.3 billion, making it the fifth-largest generic drug maker globally.
The CCI nod, however, came with a rider. To ensure there is no monopoly, the commission has asked the companies to sell assets relating to seven drugs. The asset divestment could be worth about Rs 50 crore, said analysts at Nomura Financial and Securities (India). The two companies will have six months to comply with the CCI’s condition.
Sun Pharma will have to divest all products containing tamsulosin and tolterodine, currently marketed and supplied under the Tamlet brand. For Ranbaxy, all products containing leuprorelin, marketed and supplied under the Eligard brand, will have to be divested. In case Sun Pharma doesn’t divest the distribution rights of Eligard within six months, it will have to divest its products containing leuprorelin that are currently marketed and supplied under its Lupride brand, according to the CCI report.
Ranbaxy will have to divest the brands Terlibax, Rosuvas EZ, Raciper L, Terlibax, Triolvance, Olanex F.
Sun Pharma shares opened at Rs 849, touched a high of Rs 854 on the BSE so far.
Shares of Ranbaxy opened at Rs 643, touched a high of Rs 651 on the BSE so far. A total of 110,609 shares have been exchanged on the BSE so far.