Ranbaxy clears de-merger of drug discovery unit

* Shareholders to receive one equity share of Re.1 each in RLSRL for every four equity shares of Rs.5, held in Ranbaxy

Gurgaon, Haryana, India, February 19, 2008: The Board of Ranbaxy Laboratories Limited (Ranbaxy), at its meeting held today, cleared a Scheme of De-merger of the Company's New Drug Discovery Research (NDDR) Unit into a subsidiary, Ranbaxy Life Science Research Ltd. (RLSRL). This is subject to requisite approvals.

Ranbaxy believes that this is a significant step in creating an independent pathway for NDDR with dedicated resources and an enhanced focus for long-term growth. Ranbaxy has state of the art Research infrastructure and a highly skilled scientific talent pool. These strengths can be more effectively leveraged through an independent vehicle that better aligns assets with priorities to accelerate the company's drug discovery programmes. The resulting operational freedom and flexibility will also help to open up new growth opportunities while providing a platform for increased collaboration. The demerger will result in cost savings of approx. US $ 25 Million in the current year for Ranbaxy, a recurring expense, likely to increase significantly in the coming years.

Speaking on the occasion, Mr Malvinder Mohan Singh, CEO and MD, Ranbaxy Laboratories Limited, said, "The de-merger of our NDDR Unit into a separate entity establishes a robust structure to carry out pathbreaking research at the cutting edge of modern medicine. It will also enable RLSRL to create intellectual property at a faster pace while positioning it for the future".

Under the Scheme, the shareholders of Ranbaxy will be entitled to receive one equity share of Re.1 each of RLSRL, without any payment for every four equity shares of Rs.5 each held in Ranbaxy, as on the Record Date, to be fixed for this purpose, after receipt of requisite approvals. All assets, liabilities, research personnel and pipeline related to the NDDR Unit will be transferred to RLSRL.

The Appointed Date for the Scheme to come into effect after receipt of all the requisite approvals is January 1, 2008.

Ranbaxy has subscribed to redeemable preference shares of RLSRL aggregating Rs.200 Crores, to meet its business needs. Post the De-merger, the equity capital of RLSRL will be approx. Rs. 12.6 Crores. Ranbaxy and RLSRL Employees Welfare Fund Trust will respectively hold 19.8% and 4.9% of the equity share capital of RLSRL . The balance will be held by the shareholders of Ranbaxy.

It is proposed that equity shares of RLSRL will be listed on the National Stock Exchange and the Bombay Stock Exchange while GDRs will be listed at the Luxembourg Stock Exchange.

All approvals required for the Scheme to come into effect, including that of the Punjab & Haryana High Court, are expected in the 2nd half of 2008.

Ranbaxy Laboratories Limited, India's largest pharmaceutical company, is an integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. Ranbaxy's continued focus on R&D has resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. The Company's foray into Novel Drug Delivery Systems has led to proprietary "platform technologies," resulting in a number of products under development. The Company is serving its customers in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 11 countries.