• Ranbaxy - access to Daiichi’s expertise in research

• Daiichi - benefit from low-cost production

• Increase in sales/revenues (e.g. Procter & Gamble takeover of

Gillette)

•Profitability of target company

• Increase market share

•Reduction of overcapacity in the industry

• Enlarge brand portfolio (e.g. L'Oréal's takeover of Bodyshop)

• Increase in economies of scale

• Reduced competition and choice for consumers in oligopoly

markets (Bad for consumers, although this is good for the

companies involved in the takeover)

• Likelihood of job cuts

• Cultural integration/conflict with new management

• Hidden liabilities of target entity

• The monetary cost to the company

• Integrated, research based, international pharmaceutical

company producing a wide range of quality, affordable generic

medicines

• Serving in over 125 countries and has an expanding international

portfolio of affiliates, joint ventures and alliances, ground

operations in 49 countries and manufacturing operations in 11

countries

• Ranbaxy Laboratories Limited is an Indian company incorporated

in 196. Ranbaxy went public in 1973

• The CEO of the company is Mr. Malvinder Mohan Singh

• In 1998, Ranbaxy entered Us the world's largest

pharmaceuticals market and now the biggest market for

Ranbaxy, accounting for 28% of Ranbaxy's sales in 2005

• September 1999 - Ranbaxy out-licensed its first once-a-day

formulation to a multinational company

• June 23, 2006 received from the U.S. Food and Drug

Administration a 180-day exclusivity period to sell

simvastatin (Zocor) in the U.S. as a generic drug at 80 mg

strength

• Daiichi - Sankyo Company, Ltd was established in 2005

through the merger of two leading Japanese

pharmaceutical companies

• Discovery of new medicines in the areas of infectious

diseases, cancer, bone and joint diseases, and immune

disorders

• Continuous development of novel drugs that enrich the

quality of life for patients around the world

• 1970s, In Basle a Sankyo office was opened to keep contact with

the big Swiss pharma companies

• 1985, Sankyo Europe was established in Duesseldorf

• 1988, Daiichi Pharmaceutical Europe

• 1993, established Daiichi Pharmaceutical UK, Ltd. in London

• 1990, Acquisition of Luitpold Werke, by Sankyo

• 1997, company name changed from Luitpold to Sankyo Pharma

• 2005, Daiichi - Sankyo merger

• Takashi Shoda is the president & CEO of the company

• Production plants in Pfaffenhofen (Germany) and Altkirch (France)

• 25 million packs and 1.2 billion tablets were dispatched from

Pfaffenhofen to over 50 countries worldwide

• Termination and official opening of the extended production plant

in Pfaffenhofen this year

• Gradual rise in the production volume to more than 40 millions

packs and approximately 4 billion tablets per year

• Presently, Daiichi - Sankyo is Japans 2nd largest drug maker

• Ranbaxy is a well known name in pharmaceutical company in

India, with large amount of shares both in Bombay and National

stock exchange has now sold major amount of shares to the

Japanese company Daiichi

• Daiichi Sankyo bought out the entire promoter stake of 35 per

cent in Ranbaxy Laboratories at Rs 737 per share costing $3.4

billion to $4.6 billion

• Daiichi Sankyo will hold a majority stake in Ranbaxy,however

Ranbaxy will continue to operate as an independent &

autonomous Company.

• All management and people structures across Ranbaxy

will continue as they are at present

• Mr. Malvinder Singh will be appointed Chairman of the

Board of Directors &member of the Senior Global

Management of Daiichi Sankyo ,in addition to his existing

responsibilities as CEO & MD, Ranbaxy

• 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 yr it missed its 2007 target of

becoming a $2-billion company

• Its sight on generating revenues of $5 billion by 2012, this target

too appeared to be difficult.

• Ranbaxy’s share price has gone up by just 5%, in comparison, the

RIL scrip has gone up by 288.07%, Bharti’s by 252.34% and Infosys

by 67%.

• 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.

• The sell-out option was the most profitable, both for the

promoters as well as shareholder

• Daiichi is a leading, research-based pharmaceutical

company and this deal would enable Ranbaxy to explore

their shared capabilities in drug development

• The investing company shall then be amongst the largest

generic manufacturers globally in terms of market share.

• The sale would create a new powerhouse spanning the

entire pharmaceutical spectrum

• Part of the problem, state officials say, is that generic drug

companies in Japan are small and doctors do not trust them,

by effectively rebranding Ranbaxy generics under the well-

known name of Daiichi Sankyo, this may change

• A complementary business combination that provides

sustainable growth by diversification that spans the full

spectrum of the pharmaceutical business

• An expanded global reach that enables leading market

positions in both mature and emerging markets with

proprietary and non-proprietary products

• Strong growth potential by effectively managing

opportunities across the full pharmaceutical life-cycle

• Competitiveness by optimizing usage of R&D and

manufacturing facilities of both companies

• The combination of the two companies will give Ranbaxy

access to Daiichi 's expertise in research while the

Japanese company will benefit from low-cost production

on the sub-continent, amid a deepening profits crisis in

Japan’s drugs industry

• 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, bypassing a

lot of European and U.S. companies that are finding it difficult to

enter the Japanese market, where safety and testing requirements

are a lot higher

• The share price of Ranbaxy rose 3.86% to Rs 526.40 on June 9, two

days before the company announced its buyout by Daiichi Sankyo.

• The benchmark Sensex plunged 506 points the same day

• June 10, a day before the deal was announced, the Ranbaxy scrip

surged 6.52% to Rs 560.75 and the Sensex fell 177 points. The stock

ended almost flat at Rs 560.80 on June 11

• June 11 The reason as to why the Ranbaxy stock had been moving

against the general market direction since it became public when

the company announced about the sale of a majority stake in it to

the Japanese firm Daiichi Sankyo

It was not just Ranbaxy that had a run up , but the companies

that are promoted by Ranbaxy’s promoter family also rallied.

Zenotech surged 20 per cent, Religare (8.53 per cent), Fortis

Financial Services (10 per cent), Fortis Healthcare (18.87 per

cent), Krebs Biochemicals (4.92 per cent), Jupiter Biochemicals

(13 per cent) and Orchid increased by 13.56 per cent.

• The deal is a win-win for both Ranbaxy and Daiichi. Ranbaxy

couldn’t have grown much on the basis of first to file. It has

actually left out the NCE pipeline which Teva has done. It actually

left out the bio-similar plant which they were desperately trying

to do through Zenotech. So, Ranbaxy’s opportunities seem to

have exhausted.

• Daiichi, on the other hand, is a small company with 2-3 big

brands like Olmesartin and Avista which is a huge cancer drug. It

is one of the best gold standard cancer drugs.

• For Daiichi, it was important to have some kind of generic

play that Novartis has with Sandoz, which is the second

largest generic company in the world. Novartis is a USD 30-35

billion company. Maybe Daiichi at the very start of that graph

is trying to do exactly that. They have a great play in

Ranbaxy, which has a manufacturing and research base. It

will also benefit from the cost-competitive advantage and

then grow its business from the two angles.