Japan's Daiichi to acquire stake in Ranbaxy

New Delhi: Japanese drugs major Daiichi Sankyo Wednesday said will pay $4.6 billion in cash to buy majority stake in Ranbaxy Laboratories, India's largest pharmaceutical firm with global revenues of $1.6 billion, including the entire 34.8 percent equity held by its promoters.
The mega deal - the largest in India's $7.3 billion pharmaceutical industry - is estimated to value Ranbaxy at $8.9 billion and catapult the combined entity as the world's 15th biggest drugs maker from the current 22nd position.
The promoters of the group, led by brothers Malvinder Mohan Singh and Shivinder Mohan Singh, hold a 34.8-percent stake and will get Rs.95.76 billion ($2.4 billion) for their stake.
Along with open offer for 20 percent stake, which Daiichi Sankyo will make soon, the Japanese company will spend an estimated $4.6 billion for the controlling stake.Following the deal, expected to conclude by March 2009, Ranbaxy will become a subsidiary of Daiichi Sankyo but continue to list on Indian bourses.
"For me and the promoters of Ranbaxy Laboratories, this is certainly a very emotional decision," the company's managing director Malvinder Singh told a press conference here, confirming the deal with Daiichi.
"This is indeed a historic date not just for the two companies but also for the future direction of the global pharmaceuticals industry," he told reporters at the Shangri La hotel here.
In addition to his present responsibilities as chief executive and managing director of Ranbaxy Laboratories, he will also be the company's chairman, Malvinder Singh added.
As the news on the deal started emerging Wednesday morning, the equity shares of Ranbaxy first dipped a bit but soon moved up by 5 percent on the Bombay Stock Exchange (BSE) to a 52-week high of Rs.592.70.
"From Ranbaxy’s point of view, an exit option makes sense for the promoters to sell to a well reputed and established company such as Daiichi Sankyo," said Shivani Shukla Raval, industry manager for healthcare practice with global consultancy Frost and Sullivan.
"Together with the combined resource pool, the company would be a strong contender in both the generic as well as innovator space. And it would enable Ranbaxy to be a truly research based pharmaceutical Company.
"Under the deal reached Wednesday, Daiichi Sankyo will pay Ranbaxy promoters at least Rs.737 per share for the entire 34.8 percent stake, and also make an open offer for a further acquisition of 20 percent at the same price.
Ranbaxy will also make a preferential equity offer to the Japanese company for 9.5 percent of the equity at Rs.737 and issue warrants for 4.9 percent that can be converted into equity at a later date.
The offer price of Rs.737 represents a premium of 53.5 percent over the average price of the Ranbaxy scrip for three months ended June 10 and 31.4 percent over the price as on that date."This is a path-breaking deal and redefines India's pharmaceutical landscape," Malvinder Singh said, after successfully negotiating the deal with Daiichi, which has a Indian subsidiary Daiichi Sankyo India Pharma, based out of Mumbai.
"Together with our pool of scientific, technical and managerial resources, we will now enter into a new orbit to chart a higher trajectory of sustainable growth in the medium and long term,” he added.
Daiichi Sankyo president Takashi Shoda said the deal was part of the group's strategy to become a global company and complement their presence in original drugs with the fast-growing non-proprietary pharmaceuticals. “This complementary combination represents a perfect strategic fit and delivers a considerable opportunity for the future growth of the new Daiichi Sankyo group,” he added.

Sarin exiting Vodafone with over £25 mn

London: Vodafone CEO Arun Sarin is leaving the company with over 25 million pounds in his pocket.
During his tenure, Sarin, 53, accumulated 28.5 million shares and share options which he has yet to collect. He also has 14.5 million shares and share options which he has not yet cashed, according to the company's annual report and accounts published yesterday.
After he steps down at the annual meeting, he will remain as a consultant on a "nominal" salary until retirement next March. Assuming the company continues to perform over that period, when he leaves, his shares and options will be worth just over 22 million.
During his final year as chief executive, Sarin earned 3,595,000 pounds in salary and bonus, taking his total earnings to 25 million, ‘The Guardian’ reported today.
The report said that in the past, Sarin had been allowed to re-invest his annual bonus, which was 2.13 million for the year to the end of March 2008, but because he is leaving the company he will collect it in cash.
Sarin will be replaced by Vittorio Colao, who joined Vodafone in 2000. Colao will be paid a 975,000 pounds salary, compared with the 1.3 million pounds Sarin received for the year to the end of March 2008, according to the group's annual report and accounts published yesterday.
Sarin reportedly plans to spend the summer "on sabbatical" and travelling, and intends to return to the US for his next job.

Tata Motors set for more acquisitions

Mumbai: Leading automaker Tata Motors on Tuesday said it is looking at further acquisition opportunities and strategic alliances in India and abroad and is also seeking to raise USD one billion in debt or equity from overseas market.
Tata Motors, which completed acquisition of UK luxury brands Jaguar and Land Rover for USD 2.3 billion earlier this month, is part of Ratan Tata-led domestic conglomerate that has been engaged in a number of high-profile overseas takeover deals such as that of Anglo-Dutch steelmaker Corus.
"The company has major growth plans for expanding its product range and presence in the domestic and global markets in commercial and passenger vehicles, including strategic alliances and acquisition opportunities," Tata Motors said in a notice sent to its shareholders seeking their approval on various issues such as fund raising plans.
The company is seeking the shareholders' consent for raising up to one billion dollars through issue of Foreign Currency Convertible Bonds (FCCBs) or equity shares in the international market, the circular said.
Besides, it has also sought shareholders' nod for raising the company's borrowing limit to Rs 20,000 crore (about USD five billion). As part of its long term funding plans, it would raise Rs 7,200 crore through three simultaneous but separate rights issues to part-finance its 2.3 billion-dollar buyout of British luxury brands Jaguar and Land Rover.
The shareholders nod have also been sought to raise 500- 600 million dollar (Rs 2,700 crore) in international market, which would be out of the approval sought for USD one billion.
Tata Motors said it would continue to pursue growth plans in passenger and commercial vehicle segments through measures such as launch of new models and investment in manufacturing facilities and technology.

Sensex in red; HDFC dips, Ranbaxy inclines

Mumbai: The Sensex opened 86 points lower at 14,980. The index touched a day's high of 15,088 due to fresh buying in healthcare stocks. Unabated selling in IT, banking, consumer durables and realty stocks pushed the index into a negative zone and touched a day's low of 14,645 - down 443 points from today's high.
The index recovered smartly in late noon deals and finally ended with a loss of 177 points at 14,889. The market breadth was negative - out of 2,699 stocks traded, 1,667 declined, 964 advanced and 68 were unchanged.
The NSE Nifty ended with a loss of 51 points at 4,450.

INDEX SHAKERS...
HDFC plunged 4.8% to Rs 2,207, while ONGC tumbled 4.7% to Rs 873. HDFC Bank declined 4.5% to Rs 1,184.
TCS slipped 3.9% to Rs 916 and Jaiprakash Associates lost 3.5% to Rs 184. Infosys dropped around 3% at Rs 1,904.
Satyam was down 2.8% to Rs 491. ITC and Reliance Infrastructure declined 2.6% each at Rs 207 and Rs 1,038, respectively.
ICICI Bank, Wipro and SBI were the other major losers.

...AND THE MOVERS
Ranbaxy surged 6.5% to Rs 526, Cipla gained 2.1% at Rs 206.
Reliance moved up 1.7% at Rs 2,163. HUL advanced over 1% at Rs 232.
Maruti added 0.8% to Rs 736. ACC, BHEL and Hindalco were up 0.5% each at Rs 613, Rs 1,375 and Rs 176, respectively.

MOST ACTIVE COUNTERS
Reliance led the value chart with a turnover of Rs 281.98 crore followed by Reliance Capital (Rs 261.73 crore), Reliance Petroleum (Rs 231.74 crore), Ranbaxy (Rs 213.44 crore) and Anu Labs (Rs 167.13 crore).
IFCI topped the volume chart with trades of around 1.85 crore shares followed by Reliance Petroleum (1.36 crore), Ispat Industries (1.34 crore), Reliance Natural Resources(1.31 crore) and Spice Telecom(1 crore).