Japanese third largest drug maker by sales, Daiichi Sankyo in June 2008 announced to

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buy out the Ranbaxy promoters' in a deal totally valued at $4.6 billion. It was a strategic move on the part of innovator company to acquire a generic drug company considering that nations across the globe were working towards reducing healthcare costs.

Growth of patented drugs stagnated in the developed world including the US, while off-patent blockbuster drugs experienced sales erosion from generic products.

Following the deal, the combined entity jumped straight into top 15 pharma companies across the world with a combined worth of about $30 billion and presence in over 60 countries. Daiichi Sankyo and Ranbaxy then, on fully diluted basis, were valued at $20 billion and $8 billion, respectively.

The Japanese company had agreed to acquire 34.82 per cent of the stake of the company from the promoters. Daiichi Sankyo bought a majority stake aiming to take advantage of rising demand for generic drugs.

The purchase price of Rs 737 (in the open offer) by Daiichi Sankyo represented a premium of over 53 per cent to Ranbaxy’s average daily closing price on NSE for the three months ending June 10, 2008.

Besides Rs 10,000 crore for the promoters' share, Daiichi Sankyo also invested an additional Rs 10,000 crore to hike its stake in to about 64 per cent.

As per the agreement, Malvinder Mohan Singh was asked to continue leading the company as its chief executive officer and managing director till 2013. He also assumed an additional responsibility of chairman of board after the deal closure.