Sun Pharma gets RBI nod for transfer of Ranbaxy's overseas investments

The Reserve Bank of India (RBI) has approved the transfer of Ranbaxy's overseas investments to Sun Pharmaceutical Industries and has also given a nod to issue the Mumbai-based drug firm's shares to the non-resident shareholders of Ranbaxy as part of their US $4-billion merger deal.

In a Bombay Stock Exchange (BSE) filing, Ranbaxy Laboratories said that the RBI on Monday gave approval for transfer of overseas investments held by the drug firm in its joint venture and wholly-owned subsidiaries to Sun Pharma, pursuant to the proposed merger of the two companies through a Scheme of Arrangement.

"The central bank also approved issue of equity shares of Sun Pharma to the non-resident holders of equity shares of Ranbaxy Laboratories," the filing added.

The two firms also received approval from the Competition Commission of India (CCI) for sale of seven brands to Emcure Pharma to comply with the fair trade watchdog's conditional nod for their merger.

In an order issued on Monday, CCI approved the deal with Emcure, which would purchase the 'divestment products' that were ordered to be sold in an earlier direction issued in December 2014 by the fair trade regulator.

These seven brands were at the core of the CCI's contention that the merger between Sun Pharma and Ranbaxy was 'prima-facie' in violation of competition laws and therefore the watchdog had ordered divestment of those products under its 'conditional' approval to the deal.

Despite the sale of these brands, the Sun-Ranabxy merger would create the country's largest and the world's fifth largest drugmaker.

In December, CCI had directed Sun Pharma to divest all products containing 'Tamsulosin + Tolterodine' which are marketed and supplied under the Tamlet brand name.

Similarly, Ranbaxy was directed to divest all products containing Leuprorelin which are marketed and supplied under the Eligard brand name. It also had to divest products such as Terlibax, Rosuvas EZ, Olanex F, Raciper L and Triolvance.