[By NBC-1TV H. J Yook]Sun Pharma and Ranbaxy today announced entering into definitive agreements for Sun Pharma to acquire 100% of Ranbaxy in an all-stock transaction. Under these agreements, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy. This exchange ratio represents an implied value of Rs 457 for each Ranbaxy share.

This combination creates the 5th largest specialty generics company in the world, and the largest pharma company in India. The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant specialty + generic portfolio, including 629 ANDAs. On a pro forma basis, the combined entity’s revenues are estimated at US$ 4.2 billion with EBITDA of US$ 1.2 billion for the twelve month period ended December 31, 2013. The transaction value implies a revenue multiple of 2.2 based on 12 months ended December 31, 2013.

Dilip Shanghvi, Managing Director of Sun Pharma, said, “Ranbaxy has a significant presence in the Indian pharma market and in the US where it offers a broad portfolio of ANDAs and first-to-file opportunities. In high-growth emerging markets, it provides a strong platform which is highly complementary to Sun Pharma’s strengths. We see tremendous growth opportunities and are excited with the prospects to create lasting value for both our shareholders through a successful combination of our franchises.”