ranbaxy- daichii2
Transcript of ranbaxy- daichii2
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RATIONALE BEHIND
RANBAXY
DAIICHI-SANKYO
DEAL
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Company profile of Ranbaxy:Established in 1937 by Ranjit Singh and Gurbax SinghIndiaslargest pharmaceutical companyRanked amongworldstop 10 generic companyIt has a presence in 23 of worlds top 25 pharmaceutical market withexport in over 125 countries
Strengths of Ranbaxy:Cost effective technology
Drug delivery system management
Production of generic drugs
Pharmaceutical ingredients ( apis) future growth drivers
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Company profile of Daiichi sankyo:
Established in Sept. 28th2005.(JAPAN)CEO :TAKASHI SHODA
Workforce : 16,237 People.
Major Industry : Ethical Drug Manufactures.
Annual Sales in FY07: US$ 8.7 Bn
Strengths of Daiichi sankyo :Japans second largest drug maker company
Ranked 22nddrug maker in the world
Providing a stable supply of top-quality pharmaceutical
products
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Rationale of the deal:From Daiichi sankyo perspective:
Achieving mid-term management plan.
Broader product base and well distributed risks.
Ranbaxys addition can boost Daiichi Sankyos position from #22 to #15 by
market capitalization in the global pharmaceutical market.
Daiichi Sankyo expects that its return on equity will increase from 6% to10% in fiscal 2010 as a result of the merger.
The most important benefit for Daiichi Sankyo will be the access that itwill gain to Ranbaxys presence in 21 emerging markets, out of the total of 40locations where it is operating.
Daiichi Sankyo seeks to exploit Ranbaxys entire value chain
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Rationale of the deal (contd.):Ranbaxy envisages a broader product portfolio for itself as a result of the
merger.
The company will be free of existing debt as Daiichi Sankyo will be pooling
financial resources towards re-financing its entire debt.
Subsequently, Ranbaxy expects to have approximately $700 million (INR3000
crores, exchange rate: 1USD=42.8INR) as cash surplus, which increases its bookvalue per share from $1.7 to $4.7. Ranbaxy believes that a stronger balance sheet
will allow the company more flexibility to pursue organic as well as inorganic
growth opportunities to enhance its branded drugs business and move up the
pharmaceutical value chain.
As regards markets, the biggest gain for Ranbaxy is its smoother access to theJapanese market, being part of Daiichi Sankyo.
Equally important for Ranbaxy is to become the largest player in Japans generic
drugs market, for which the company is eyeing organic and inorganic routes.
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Rationale of the deal (contd.):
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