8. Sun Pharmaceutical/Ranbaxy Laboratories

Deal value: $3.2 billion
Deal status: Open

While this M&A action is generally referred to as the Sun/Ranbaxy deal, it in fact is an agreement struck between India's Sun and Japan's Daiichi Sankyo, which paid $4.6 billion for controlling interest in Ranbaxy in 2008 as a generics play. What it got instead was non-stop regulatory issues with the FDA, which started shortly after Daiichi struck its deal, and which continue to this day. Four of Ranbaxy's plants are currently banned from selling into the U.S.

With this all-stock deal, Sun will become India's largest drugmaker, and Daiichi Sankyo will get a 9% stake in Sun. When the deal was announced, Jefferies & Co analyst Naomi Kumagai told Reuters, "I wouldn't call this an exit. It's an ownership transfer. Another company will take over control for them of a place that had a lot of issues. In that sense, it should be a good thing."

Sun's managing director, Dilip Shanghvi, has been looking to get a bigger piece of the U.S. market for years, and with Ranbaxy he will accomplish that. Ranbaxy has had a lock on a number of first-to-file generics, like for Novartis' ($NVS) heart drug Diovan and AstraZeneca's ($AZN) heartburn blockbuster Nexium. Its regulatory problems, however, have complicated their launch. The combo of the two companies will make Sun a significant force in the world market by any number of measures. It will be India's largest drugmaker, the largest Indian drugmaker selling into the U.S. market and the fifth-largest generics company globally with combined sales of $4.2 billion.

Shanghvi has promised that his attention initially will be on getting Ranbaxy's plants focused on cGMP and its issues with the FDA resolved. The deal is slated to close at year end.

For more:
Sun Pharma hopes to turn fortunes of Ranbaxy around with $3.2B buyout
Daiichi Sankyo sells off Ranbaxy's problems to Sun Pharma
Daiichi Sankyo pledges 'drastic measures' to get Ranbaxy in line
Ranbaxy manufacturing drama continues with FDA action on API plant

-- Eric Palmer (email | Twitter)

8. Sun Pharmaceutical/Ranbaxy Laboratories

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