Source: VCCircle.com

The key highlights of the Ranbaxy- Daiichi deal

1) Daiichi Sankyo will acquire the entire shareholding of the Sellers in Ranbaxy and further seek to acquire the majority of the voting capital of Ranbaxy at a price of Rs 737 per share with the total transaction value expected to be between $3.4 to $4.6 billion (currency exchange rate: US$1=Rs43). On the post closing basis, the transaction would value Ranbaxy at $8.5 billion.

2) Daiichi Sankyo is expected to acquire the majority equity stake in Ranbaxy by a combination of (i) purchase of shares held by the Sellers, (ii) preferential allotment of equity shares, (iii) an open offer to the public shareholders for 20% of Ranbaxy’s shares, as per Indian regulations, and (iv) Daiichi Sankyo’s exercise of a portion or all of the share warrants to be issued on a preferential basis. All the shares/warrants will be acquired/issued at a price of Rs 737 per share.

3) The acquisition is expected to be completed by the end of March, 2009. Upon completion of the transaction, Ranbaxy is expected to become a subsidiary of Daiichi Sankyo.

4) The deal will be financed through a mix of bank debt facilities and existing cash resources of Daiichi Sankyo.

5) This purchase price represents a premium of 53.5% to Ranbaxy’s average daily closing price on the National Stock Exchange for the three months ending on June 10, 2008 and 31.4% to such closing price on June 10, 2008.

6) It is anticipated that the transaction will be accretive to Daiichi Sankyo’s EPS and Operating income before amortization of goodwill in the fiscal year ending March 31, 2010 (FY2009).