Sun Pharma gets US FTC nod to close Ranbaxy deal

India's largest pharmaceutical company, Sun Pharmaceutical Industries, Monday said the US Federal Trade Commission (FTC) has approved its proposed acquisition of Ranbaxy Laboratories.

FTC's review of early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) of the US was one of the primary requirements to close the acquisition.

The clearance will allow Sun Pharma to continue selling drugs in the US market despite the merger of the two Indian companies.

With this, the decks are cleared for the closure of the $4-billion all stock-transaction deal announced in March 2014. The combined entity will be the fifth largest generic company in the world.

Last week, Sun Pharma's managing director Dilip Shanghvi had said he was hopeful of concluding the deal by mid-January 2015. The only hurdle before Sun Pharma is a clearance from the Punjab and Haryana High Court, which will hear the case today.

Sun Pharma's share prices were up by 1.94 per cent on the Bombay Stock Exchange (BSE) Monday to Rs 933.70 around noon. Ranbaxy's share prices also surged by 2.58 per cent to Rs 712.80 on the BSE.

Sun Pharma and Ranbaxy said the FTC accepted a proposed consent agreement pursuant to which, the two companies have agreed to divest Ranbaxy's interests in generic minocycline tablets and capsules to an external third party.

"Sun Pharma and Ranbaxy are working closely towards completion of the transaction and will comply with the conditions laid down in the FTC consent agreement within the specified time," the two companies said in a statement.

In early December, the Competition Commission of India (CCI) had given conditional approval for the proposed acquisition, mandating a divestment of seven products in the domestic market - six from Ranbaxy and one from Sun Pharma, within six months.

Sources say the products are worth about Rs 137 crore, which is less than 1 per cent of the combined entity's revenues. The competition watchdog also assigned PriceWaterhouse to monitor the divestment of these brands.