CCI expands probe into Sun-Ranbaxy deal; seeks public scrutiny

Tags: Companies
Widening its scrutiny of the multi-billion dollar Sun Pharma-Ranbaxy deal, fair trade watchdog CCI has asked the two pharma majors to make public specific details of their proposed merger within ten days.

This is probably the first instance where the Competition Commission of India (CCI) has ordered a public scrutiny of a proposed merger and acquisition (M&A) deal to ensure compliance to fair trade regulations.

Sun Pharma and Ranbaxy, which had announced a $4-billion deal in April this year, were asked late last night to make public details of their proposed transaction in a 'prescribed format' within 10 working days.

"The company has received direction vide letter dated August 27, 2014 under Section 29(2) of the Competition Act, 2002 from the Competition Commission of India (CCI) directing the company to publish the details of the proposed combination in the prescribed format within 10 working days from the date of the said letter of the CCI," Ranbaxy Labs said in a stock exchange filing this morning.

In a similar filing, Sun Pharma also informed the stock exchanges that they "are in receipt of direction under Section 29(2) of the Competition Act, 2002 from the CCI directing Sun Pharma to publish the details of the proposed combination within 10 working days from August 27, 2014 in Form IV contained in Schedule II to the Combination Regulations".

Under this section, if the CCI is "prima facie of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall... Direct the parties to the said combination to publish details of the combination within ten working days of such direction..."

Such disclosure needs to be made "in such manner, as it (CCI) thinks appropriate, for bringing the combination to the knowledge or information of the public and persons affected or likely to be affected by such combination."

Earlier, the CCI had sought specific details from the two companies before approving the proposed acquisition of Ranbaxy in an all-stock deal by Sun Pharma.

For the CCI, this is one of the biggest M&A deals and also the first major transaction from pharma sector and therefore its decision in this case could have larger implications.

In case the CCI finds the deal in the current form could hurt fair competition in the domestic pharma market, it can even direct the companies to divest some assets as a pre-requisite for approval.

The $4 billion-worth deal would create the fifth- largest speciality generics company in the world and the largest pharmaceutical company in India.

The combined entity would have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of speciality and generic products marketed globally.

EDITORIAL OF THE DAY

  • Sebi’s guidelines for commodity bourses will help farmers get fair price

    As the timeline for the proposed merger of the Forward Market Commission (FMC) with the Securities and Exchange Board of India (Sebi) comes closer, th

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

The China story isn’t over yet

China’s financial markets are currently in the eye of a ...

Anuja Sharma

Love yourself to love others

“There are two basic motivating forces: fear and love. When ...

Gautam Gupta

It's a 'blog eat blog' world out there

Let me tell you, fashion journalism has truly taken the ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture