India's FIPB clears Daiichi Sankyo's deal with Ranbaxy
This article was originally published in Scrip
India's Foreign Investment Promotion Board (FIPB) has approved Daiichi Sankyo's acquisition ofRanbaxy Laboratories, which entails a foreign direct investment (FDI) inflow of Rs215.6 billion ($4.9 billion) but recommended that the proposal be considered by India’s cabinet committee on economic affairs (CCEA). Indian regulations require all proposals with FDI exceeding Rs6 billion to be submitted for cabinet approval. The FIPB approved the deal on July 29th, but had to re-calculate the amount of FDI from the acquisition and hence reconsider the proposal, local media reports said. Daiichi Sankyo signed a share purchase agreement with Ranbaxy's founding family to acquire 34.81% of the company’s equity capital at Rs737 ($17.18) per share. It followed this up with an offer to the remaining shareholders of Ranbaxy Laboratories to acquire up to 92,519,126 equity shares of Rs5 each, representing 20% of the Indian company’s voting capital, at Rs737 per share. The offer closes on September 4th.