Sun closes in on Ranbaxy deal with CCI approval

By Dan Stanton

- Last updated on GMT

Sun and Ranbaxy merger will form India's largest pharma firm
Sun and Ranbaxy merger will form India's largest pharma firm

Related tags Sun pharma

The Competition Commission of India (CCI) has approved Sun Pharma’s $3.2bn acquisition of Ranbaxy.

The deal first announced in April, set to create the largest Indian pharma company and the world’s fifth largest specialty generics company, has moved one step closer following the approval by the CCI of the merger last week.

“The Order of the CCI approving the deal is an important milestone for the transaction,”​ said Dilip Shanghvi, Managing Director of Sun Pharma. “It revalidates our view that the Sun Pharma and Ranbaxy businesses complement each other with limited product overlap, and will offer a comprehensive product basket to enable future growth.”

There are, however, several provisos including the requirement that seven products worth RS 137 crore ($22m) are divested.

These include six Ranbaxy brands worth Rs 54 crore and Sun Pharma’s Istavel and Istamet, licensed from Merck Sharp & Dohme, and containing the phosphate salt Sitagliptin. Two of Ranbaxy's pipeline products containing Sitagliptin could also be cancelled, the firm has said, but overall the brands divested will represent less than 1% of the combined firms’ revenue in India.

Ranbaxy was in the news last week​ after it received a statement of non-compliance from German authorities following an inspection at its aseptic facility in Dewas, India.

This is the latest in a long string of regulatory problems for Ranbaxy, with the same site receiving a consent decree from the US FDA in 2013​, while the Toansa, India API plant , temporarily suspended production earlier this year.

New owners Sun Pharma, however, is no stranger to GMP violations, being hit with a US FDA warning letter and a consent decree​ at a plant in Gujarat in May.

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