Indian fair trade regulator Competition Commission of India (CCI) Monday cleared the $4 billion merger between pharmaceutical majors Sun Pharma and Ranbaxy, with the condition that both the companies would have to divest seven key products.
According to the Corporate Affairs Ministry, CCI in its meeting held on Dec 5, approved the proposed merger, subject to the parties inter alia carrying out the divestiture of their products relating to seven relevant markets for formulations.
"Further, the commission also directed that the proposed merger shall not take effect before the parties have carried out the divestiture of the products," the ministry was quoted in a statement.
CCI said that earlier in May it had received a notice from both the parties asking permision for merger of Ranbaxy into Sun Pharma.
The regulator ordered Ranbaxy to sell six products and Sun Pharma to divest one to address monopoly concerns.
"The commission focussed its investigation on some relevant markets for formulations where the proposed combination was likely to have an appreciable adverse effect on competition in the relevant market in India," the fair trade regulator said.
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The ministry further said that it has given nod for the merger after investigating the impact of the development on the basis of combined market share of the parties, incremental market share as a result of the proposed combination, market share of the competitors, number of significant players in the relevant market.
The CCI's approval comes after the Foreign Investment Promotion Board (FIPB) gave its clearance to the deal.