EBIDTA of Ranbaxy is very low around 10%, way below industry standards and Sun Pharma has to increase the EBIDTA Sun Pharma has to increase the profitability in emerging markets like Romania where Ranbaxy is doing bad There may be an issue with the Competition Commission of India as there are nearly 25 drugs in which the combined entity holds more than 40% market share Ranbaxy has high debt on its balance sheet and Sun Pharma needs to come out with ways to reduce the debt going forward. The deal is USD 4 billion an may limit the Sun Pharma from entering the speciality business for some time However, Sun Pharma will have tough task to shelve high overheads in Ranbaxy and improve profitability in business - something it has done in case of Taro It will be really challenging to integrate the 9000 plus marketing personnel of both the companies given that he culture are different g) The regulatory issues that can come up are There are around 46 drugs in which the combined entity becomes a dominant player. Competition Commission of India is currently watching whether the company increases the prices or cuts production in these categories The companies have shortlisted 37 molecules out of 246 molecules in which their combined market share is more than 15 per cent while in some cases it stands above 90 per cent. The individual market share of the companies in these 37 molecules is greater than 5 percent. CCI has said that public consultation has been launched in order to determine whether the combined entity has any adverse impact on competition in relevant market in India. The roadmap for integration should be Regulatory approvals from various bodies such as SEBI, CCI, Stock Exchanges, High Courts of Gujarat, Haryana and Punjab, and the stakeholders of both companies
EBIDTA of Ranbaxy is very low around 10%, way below industry standards and Sun Pharma has to increase the EBIDTA Sun Pharma has to increase the profitability in emerging markets like Romania where Ranbaxy is doing bad There may be an issue with the Competition Commission of India as there are nearly 25 drugs in which the combined entity holds more than 40% market share Ranbaxy has high debt on its balance sheet and Sun Pharma needs to come out with ways to reduce the debt going forward. The deal is USD 4 billion an may limit the Sun Pharma from entering the speciality business for some time However, Sun Pharma will have tough task to shelve high overheads in Ranbaxy and improve profitability in business - something it has done in case of Taro It will be really challenging to integrate the 9000 plus marketing personnel of both the companies given that he culture are different g) The regulatory issues that can come up are There are around 46 drugs in which the combined entity becomes a dominant player. Competition Commission of India is currently watching whether the company increases the prices or cuts production in these categories The companies have shortlisted 37 molecules out of 246 molecules in which their combined market share is more than 15 per cent while in some cases it stands above 90 per cent. The individual market share of the companies in these 37 molecules is greater than 5 percent. CCI has said that public consultation has been launched in order to determine whether the combined entity has any adverse impact on competition in relevant market in India. The roadmap for integration should be Regulatory approvals from various bodies such as SEBI, CCI, Stock Exchanges, High Courts of Gujarat, Haryana and Punjab, and the stakeholders of both companies