The Economic Times: March, 2015
New Delhi: The Competition Commission of India (CCI) has given final clearance to Sun Pharmaceutical-Ranbaxy Laboratories merger, approving divestment of seven overlapping drugs of the two companies to Emcure Pharmaceuticals.
The competition regulator had in December last year cleared the merger subject to the condition that both companies would have to divest certain products to address monopoly concerns.
"The divestment has been approved by the commission," CCI chairperson Ashok Chawla told ET.
This clears the way for creating the biggest drug company in India with a market share of 9% and the fifth largest generic drug firm in the world. Sun had in April last year agreed to acquire Ranbaxy in a $4-billion all-stock deal.
Sun Pharma's shares closed marginally down at Rs 1,024 on Bombay Stock Exchange on Monday while Ranbaxy's shares closed at Rs 805, down 0.24% from the previous session.
Competition Commission of India had appointed PwC as a monitoring agency for the divestment process. The brands CCI had identified included Tamlet, Rosuvas EZ, Eligard, Terlibax, Olanex F, Raciper L and Trioolvance.
A company statement in December 2014 noted that these products constituted less than 1% of the combined entity's revenues in India.
Both companies were also required to extend transitional support in order to ensure the continued supply of the divested products in the relevant markets.
However, Emcure stated that it did not require any transitional support.
In its report, the monitoring agency has concluded that Emcure as a potential purchaser is likely to be a viable, independent and effective competitor in the relevant markets pertaining to the divestment products.
"Thus, the purchaser proposed by the parties meets the purchaser requirements provided in the order," the Competition Commission of India order said. "This order shall stand revoked if, at any time, the information provided by the parties or Emcure is found to be incorrect," the order said.
The regulator said that it has found Emcure to be a company active in the sales and marketing of pharmaceutical products in the India and has the financial resources, proven expertise, manufacturing capability or ability to outsource manufacturing and incentive to maintain and develop the divestment products, as a viable and active competitor to the parties in the relevant market.