Ranbaxy Sellout- A Preview

Started by Ranjit Singh and Gurbax Singh- the name Ranbaxy is a fusion of original promoters, then Bhai Mohan Singh took over Ranbaxy Ranbaxy started out as a distributor of medicine and turned into an MNC by getting over 80% of its business from outside the country. 1969 its started its journey as an Indian pharmaceutical company into generic drugs ;it launched the product Calmpose which was Indias answer to Roches Valium

Ranbaxy Sellout- A Preview

Ranbaxy Laboratories Ltd went public in 1973 and sleeping pill Calmpose catapulted the company into big league In 1982, Parvinder Singh became the MD; however , BMS and Parvinder Singh had a row over expansion and strategy & planning which let to the ousting of BMS from the company in 1999 Irrespective of their difference, both Father & son took full advantage of the opportunities presented; neither spared any efforts to get the company where they wanted it

Ranbaxy Sellout- A Preview

In 2006, Malvinder Mohan Singh, took control of the company by becoming the MD and CEO and in an unexpected and stunning move the company sold its majority stake of more than 50% to the Japanese firm Daiichi Sankyo Also, Daiichi would make an open offer for an additional 20 % stake in Ranbaxy at a price of 737 per share, which represents a premium of over 50% on the average price over the last 3 months.

Ranbaxy Sellout- A Preview

Post acquisition, Ranbaxy would become a debt- free firm with a cash surplus of around 2,800 crores Malvinder Singh will continue as CEO and MD and the company will retain its name. Malvinder Singh would also assume the position of Chairman of Board upon the deals closure The Singh family would net in about 10,000 crores by selling their stake.

Points to Ponder
Analyze the Ranbaxy sellout in context of Globalization. Do you support the above deal of Ranbaxy. State Reasons. List some of the factors that are attracting Global Pharmaceutical companies to India?

Terms A generic drug is a pharmaceutical product, usually intended to be

interchangeable with an innovator product, that is manufactured without a licence from the innovator company and marketed after the expiry date of the patent or other exclusive rights. Generic drugs are marketed under a non-proprietary or approved name rather than a proprietary or brand name. Generic drugs are frequently as effective as, but much cheaper than, brand-name drugs. For example, paracetamol is a chemical ingredient found in a number of brand-name painkillers, but is also sold as a generic drug (not under a brand name). Because of their low price, generic drugs are often the only medicines that the poorest can access.


Drug patenting allows pharmaceutical companies to legally protect, patent, the components of the drugs they create in their research labs. Drugs that are patented are protected from competition, as other companies cannot use the same mixture of ingredients to create competing drugs. Patents last for 20 years. Dugs worth $90bn are going off patent in the near future.

Analyze the Ranbaxy sellout in context of Globalization.

India is certainly losing hold over its traditional Pharma industry, just as old players of the game with substantial size are calling quits and monetizing their decades old generics model. In the Daiichi-Ranbaxy deal, the Japanese company benefited from Ranbaxys low-cost manufacturing infrastructure and its strong supply chain, even as Ranbaxy gained access to Daiichi Sankyos R&D expertise to advance its branded drugs business.

Analyze the Ranbaxy sellout in context of Globalization.

An analysis shows that several mid-size companies are vulnerable to takeovers. Ankur Drugs, Avon Organics, Lyka Laboratories, Strides Arcolab, Surya Pharmaceuticals and Venus Remedies top the list of pharmaceutical companies in which the promoters have less than a 25% stake. But I can't help feeling a twinge of regret about an Indian MNC becoming a Japanese subsidiary," Mahindra & Mahindra chairman Anand Mahindra told The Economic Times.