Market
Scenario
Why How Outcome
By
Akshay Miraje
Prateek Kulshreshtha
Sandeep Kumar
Maulik Shengal
• India represents U.S. $6 billion of the $550 billion global
pharmaceutical industry with its share increasing at 10 % a
...
 Daiichi-Sankyo acquired 34.8% stake in Ranbaxy on 11th
June, 2008
 Picked up another 9.12% through preferential allotme...
Market
Scenario How Why Outcome
• Strengthen the position of the company.
• Acquisition will provide low cost manufacturing.
• Market access to over 60 co...
• Ranbaxy has thrived on selling off-patent drugs in the U.S.
Much more expensive proposition because of litigation
• Grow...
• The sell-out option was the most profitable, both for the
promoters as well as shareholder
• Daiichi is a leading, resea...
• A complementary business combination that provides
sustainable growth that spans the full spectrum of
pharmaceutical bus...
• Big threat to the survival of the domestic generic industry
• May just dampen the motivation of other Indian aspirants
w...
• http://www.moneycontrol.com/news/business/daiichi-
acquires-525ranbaxy_362194.html
• http://www.frost.com/prod/servlet/m...
Ranbaxy  daiichi
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Ranbaxy daiichi

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Acquisition of Ranbaxy by Daiichi Dankyo

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Ranbaxy daiichi

  1. 1. Market Scenario Why How Outcome By Akshay Miraje Prateek Kulshreshtha Sandeep Kumar Maulik Shengal
  2. 2. • India represents U.S. $6 billion of the $550 billion global pharmaceutical industry with its share increasing at 10 % a year. • Indian sector represents 8% of the global industry total by volume, putting it in 4th place worldwide, it accounts for 13% by value, and its drug exports have been growing 30 % annually. • The “organized” sector of India's pharmaceutical industry consists of 250 to 300 companies, which account for 70 % of products on the market, with the top 10 firms representing 30 percent. Market Scenario Why How Outcome Ranbaxy Daiichi-Sankyo Largest in the India 8th in largest in the global general pharmaceuticals  Serving in over 125 Countries  Ground operations in 49 countries & Manufacturing in 11 countries. Strong R&D Base. 2nd largest in Japan 22nd Largest in the world  Operations in 50 countries. Producer of high quality drugs
  3. 3.  Daiichi-Sankyo acquired 34.8% stake in Ranbaxy on 11th June, 2008  Picked up another 9.12% through preferential allotment  It was an all cash transaction.  Size of the deal: US$ 4.9 Billion  As per the deal, total value of Ranbaxy was US $ 8.5 Billion. Market Scenario How Why Outcome
  4. 4. Market Scenario How Why Outcome
  5. 5. • Strengthen the position of the company. • Acquisition will provide low cost manufacturing. • Market access to over 60 countries • considerable cost savings in their diversification initiatives Daiichi-Sankyo - Benefits • Company will become one of the top 5 in generic business. • Access to Daiichi’s advanced R & D facilities. • Access to Japanese drug market • Infusion of an additional $ 1 billion into the company. • Surplus cash of Rs.3,000 crores flows in. • The market capitalization goes to $8billion & the net worth goes up. Ranbaxy - Benefits Market Scenario How Why Outcome
  6. 6. • Ranbaxy has thrived on selling off-patent drugs in the U.S. Much more expensive proposition because of litigation • Growing competition in generics at home and abroad • Though Ranbaxy did well this year it missed its 2007 target of becoming a $2-billion company • The R&D pipeline was not delivering enough products, the generic market was not generating adequate returns • Ranbaxy had three choices , It could have spent lots of money in acquiring a big generic company to grow inorganically, merge with a global player, or sell-out. Market Scenario How Why Outcome
  7. 7. • The sell-out option was the most profitable, both for the promoters as well as shareholder • Daiichi is a leading, research-based pharmaceutical company • This deal would enable Ranbaxy to explore their shared capabilities drug development • The investing company shall then be amongst the largest generic manufacturers globally in terms of market share. • Part of the problem, is that generic drug companies in Japan are small and doctors do not trust them, by effectively rebranding Ranbaxy generics under the well- Market Scenario How Why Outcome
  8. 8. • A complementary business combination that provides sustainable growth that spans the full spectrum of pharmaceutical business • An expanded global reach that enables leading market positions in both mature and emerging markets • Strong growth potential by effectively managing opportunities • Competitiveness by optimizing usage of R&D and manufacturing facilities of both companies • It will give Ranbaxy access to Daiichi 's expertise in research while Daiichi will benefit from low-cost Market Scenario How Why Outcome
  9. 9. • Big threat to the survival of the domestic generic industry • May just dampen the motivation of other Indian aspirants who want to emulate Ranbaxy's success in global Pharma • The acquisition will help Daiichi Sankyo to jump from number 22 in the global pharmaceutical sector to number 15 • Ranbaxy will gain easier access to the much-coveted Japanese market by operating from within the Daiichi Sankyo fold • The share price of Ranbaxy rose sharply Market Scenario How Why Outcome
  10. 10. • http://www.moneycontrol.com/news/business/daiichi- acquires-525ranbaxy_362194.html • http://www.frost.com/prod/servlet/market-insight- top.pag?docid=88873859 • http://www.investopedia.com/university/mergers/mergers 2.asp#axzz1Xwzuwrtw • http://www.worldpharmanews.com/corporate/1782- daiichi-sankyo-a-ranbaxy-announce-a-new-social- contribution-initiative
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