Submitted by: Group 1 Ritam Khanna F028 Saundarya Mehra F038 Nahid Seliya F050 Vatsal Shah F054 Himanshu Sharma F054 Shantanu Sharma F057 August 2019

SUN PHARMA – RANBAXY MERGER
Submitted by:
Group 1
Ritam Khanna F028
Saundarya Mehra F038
Nahid Seliya F050
Vatsal Shah F054
Himanshu Sharma F055
Shantanu Sharma F057
August 2019
Submitted to:
Dr. M.K. Satish
Associate Professor, SBM, NMIMS
Submitted in partial fulfilment for the course requirements in Strategy Implementation
(Trimester IV)
School of Business Management
NMIMS UNIVERSITY
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TABLE OF CONTENTS
1. Indian Pharmaceutical Industry.........................................................................................................3
Overview...........................................................................................................................................3
1.1 Industry share and major players.................................................................................................3
1.2 Export trends...............................................................................................................................3
1.4 Opportunities and future potential...............................................................................................4
1.5 Indian Government initiatives......................................................................................................5
2. Hypothesis.........................................................................................................................................5
3. About the Companies.......................................................................................................................5
3.1 Sun Pharmaceutical Industries Ltd..............................................................................................5
3.2 Ranbaxy Laboratories..................................................................................................................6
4. Need of the Merger............................................................................................................................6
5. Details of Transaction........................................................................................................................8
6. Anticipated Outcomes & Synergies for Sun Pharma.......................................................................10
7. Issues Related To The Merger.........................................................................................................10
7.1 Issues: Sun Pharma faced with in return of the deal..................................................................11
7.2 Post Deal Challenges:................................................................................................................11
8. Post-Acquisition Stage....................................................................................................................13
8.1 Planned measures......................................................................................................................13
8.2 Strategy to build synergies.........................................................................................................14
9. Post-merger repercussions...............................................................................................................15
10. Conclusion.....................................................................................................................................16
References:..........................................................................................................................................18
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1. Indian Pharmaceutical Industry
Overview
Indian pharmaceutical industry is the world’s largest provider of generic drugs accounting for
supplying more than 50 per cent of the global demand for various vaccines, around 40 per
cent of generic demand in the US and almost 25 per cent of all medicine in the UK.
India is the global leader in producing cost-effective generic medicines and vaccines,
supplying 20 percent of the total global demand by volume. India has an established domestic
pharmaceutical industry, with a very strong network of over 3000 drug companies and about
10,500 manufacturing units.
1.1 Industry share and major players
With 71 per cent market share, generic drugs form the largest segment of the Indian
pharmaceutical sector. Based on moving annual turnover, Anti-Infectives (13.6%), Cardiac
(12.4%), Gastrointestinals (11.5%) had the biggest market share in the Indian pharma market
in 2018.
Some of the major domestic players in the industry include Sun Pharmaceutical Industries,
Cipla, Lupin, Dr. Reddy’s Laboratories, Aurobindo Pharma, Zydus Cadila, Piramal
Enterprises, Glenmark Pharmaceuticals, and Torrent Pharmaceuticals.
1.2 Export trends
Almost half of the total production of Indian pharmaceuticals are exported to more than 200
countries in the world.
Valued at US$ 33 billion in 2017, India’s pharmaceutical exports stood at US$ 17.27 billion
in FY18 and as of FY 2019 have reached US$ 19.14 billion. Pharmaceutical exports from
India majorly include bulk drugs, drug formulations, intermediates, biologicals, AYUSH and
herbal products and surgicals.
India’s other important export destination include the United Kingdom (US$383.3 million),
South Africa (US$ 367.35 million), Russia (US$ 283.33 million) and Nigeria (US$ 255.89
million).
By 2020, the industry estimates the exports to grow by 30 per cent to reach US$ 20 billion.
1.3 FDI and recent developments
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India’s current foreign direct investment (FDI) policy allows 100 per cent FDI under
automatic route in green field pharmaceutical projects and up to 100 per cent FDI under
government approval in brownfield projects.
According to the data that has been released by the Department of Industrial Policy and
Promotion (DIPP), the Indian pharmaceutical sector has attracted cumulative FDI inflows
worth US$ 15.98 billion between the time - April 2000 and March 2019.
Following have been some of the recent developments and investments in the Indian
pharmaceutical sector:
 The Indian pharma sector saw 39 PE investment deals worth US$ 217 million in
2018.
 Investment (as a % of sales) in the R&D segment by the Indian pharma companies
increased from 5.3 per cent in FY12 to 8.5 per cent in FY18.
 The Indian pharmaceutical industry exports to the US expected to get a boost, as
branded drugs worth US$ 55 billion become off-patent.
1.4 Opportunities and future potential
In terms of having significant potential in the Indian pharmaceutical industry going forward,
following FIVE opportunities seem to be among the most emerging ones [2] –
(i) patented products
(ii) consumer healthcare
(iii) biologics
(iv) vaccines
(v) public health
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