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Generic drugs maker Sun Pharma’s merger with ailing Ranbaxy has hit the roadblock as the company has not received the approval from Competition Commission of India (CCI).
The competition regulator was supposed to come out with its decision by end of November and it is learnt that the regulator still has not given its nod to the $4 billion merger.
Regulatory approval from India’s CCI and America’s Federal Trade Commission (FTC) are yet to be received for the biggest merger and acquisition deal in pharma sector in Asia Pacific region this year.
"We have not yet received clearance order for the deal,” said a spokesperson of Sun Pharma.
CCI chairman Ashok Chawla did not respond to calls and text messages by Business Standard. On April 6, Sun Pharma announced it would buy Ranbaxy in a $4-billion all-share deal. Sun Pharma had then said it expected to close the deal by December.
CCI can take up to 210 days to clear a merger. After that a proposed deal is deemed to have been approved.
Sun Pharma had indicated in its post quarterly earnings that the merger process may spill over to 2015.
Till date, clearances have been obtained from stock exchanges in India, from shareholders and competition authorities in all applicable markets excluding India and USA. We are expecting to have the pending approvals by December 2014 but there could be minor delays if the approvals do not come by end of December 2014,” the company management had said after announcing its last quarter results.
Meanwhile, FIPB has given its nod to the merger, following which scrip of Ranbaxy and Sun Pharma rose on BSE on Monday.During afternoon trade, Sun Pharma scrip was trading at Rs 848.50, up by over a%, while shares of Ranbaxy climbed up more than 3% at Rs 634.50.
The buyout is valued at $3.2 billion, but Sun Pharma will also acquire Ranbaxy’s debt of around $800 million, taking the overall transaction value to $4 billion.
