Description
PRESENTATION ON RANBAXY AND DAIICHI
MARKET SCENERIO
By Akshay Miraje Prateek Kulshreshtha Sandeep Kumar Maulik Shengal
Market Scenario
Why
How
Outcome
Market Scenario
Why
How
Outcome
• India represents U.S. $6 billion of the $550 billion global pharmaceutical industry with its share increasing at 10 % a year. • Indian sector represents 8% of the global industry total by volume, putting it in 4th place worldwide, it accounts for 13% by value, and its drug exports have been growing 30 % annually. • The “organized” sector of India's pharmaceutical industry Ranbaxy Daiichi-Sankyo consists of 250 to 300 companies, which account for 70 % of ?Largest in the products on India the market, with the top 10 firms representing 30 nd ? 2 largest in Japan th in largest in the global ?8 percent. ?22nd Largest in the world
general pharmaceuticals ? Serving in over 125 Countries ? Ground operations in 49 countries & Manufacturing in 11 countries. ?Strong R&D Base. ? Operations in 50 countries. ?Producer of high quality drugs
Market Scenario
How
Why
Outcome
? Daiichi-Sankyo acquired 34.8% stake in Ranbaxy on 11th June, 2008 ? Picked up another 9.12% through preferential allotment ? It was an all cash transaction. ? Size of the deal: US$ 4.9 Billion ? As per the deal, total value of Ranbaxy was US $ 8.5 Billion.
Market Scenario
How
Why
Outcome
Market Scenario
Daiichi-Sankyo - Benefits
How
Why
Outcome
• • • •
Strengthen the position of the company. Acquisition will provide low cost manufacturing. Market access to over 60 countries considerable cost savings in their diversification initiatives
Ranbaxy - Benefits
• Company will become one of the top 5 in generic business. • Access to Daiichi’s advanced R & D facilities. • Access to Japanese drug market • Infusion of an additional $ 1 billion into the company. • Surplus cash of Rs.3,000 crores flows in. • The market capitalization goes to $8billion & the net worth goes up.
Market Scenario
How
Why
Outcome
• Ranbaxy has thrived on selling off-patent drugs in the U.S. Much more expensive proposition because of litigation
• Growing competition in generics at home and abroad
• Though Ranbaxy did well this year it missed its 2007 target of becoming a $2-billion company • The R&D pipeline was not delivering enough products, the generic market was not generating adequate returns • Ranbaxy had three choices , It could have spent lots of money in acquiring a big generic company to grow inorganically, merge with a global player, or sell-out.
Market Scenario
How
Why
Outcome
• The sell-out option was the most profitable, both for the promoters as well as shareholder
• Daiichi is a leading, research-based pharmaceutical
company • This deal would enable Ranbaxy to explore their shared capabilities drug development • The investing company shall then be amongst the largest generic manufacturers globally in terms of market share. • Part of the problem, is that generic drug companies in Japan are small and doctors do not trust them, by
effectively rebranding Ranbaxy generics under the well-
Market Scenario
How
Why
Outcome
• A complementary business combination that provides sustainable growth that spans the full spectrum of
pharmaceutical business
• An expanded global reach that enables leading market positions in both mature and emerging markets
• Strong growth potential by effectively managing
opportunities • Competitiveness by optimizing usage of R&D and manufacturing facilities of both companies • It will give Ranbaxy access to Daiichi 's expertise in research while Daiichi will benefit from low-cost
Market Scenario
How
Why
Outcome
• Big threat to the survival of the domestic generic industry • May just dampen the motivation of other Indian aspirants who want to emulate Ranbaxy's success in global Pharma • The acquisition will help Daiichi Sankyo to jump from number 22 in the global pharmaceutical sector to number 15
• Ranbaxy will gain easier access to the much-coveted
Japanese market by operating from within the Daiichi Sankyo fold
• The share price of Ranbaxy rose sharply
• http://www.moneycontrol.com/news/business/daiichiacquires-525ranbaxy_362194.html • http://www.frost.com/prod/servlet/market-insighttop.pag?docid=88873859 • http://www.investopedia.com/university/mergers/mergers 2.asp#axzz1Xwzuwrtw
• http://www.worldpharmanews.com/corporate/1782daiichi-sankyo-a-ranbaxy-announce-a-new-socialcontribution-initiative
doc_452282658.pptx
PRESENTATION ON RANBAXY AND DAIICHI
MARKET SCENERIO
By Akshay Miraje Prateek Kulshreshtha Sandeep Kumar Maulik Shengal
Market Scenario
Why
How
Outcome
Market Scenario
Why
How
Outcome
• India represents U.S. $6 billion of the $550 billion global pharmaceutical industry with its share increasing at 10 % a year. • Indian sector represents 8% of the global industry total by volume, putting it in 4th place worldwide, it accounts for 13% by value, and its drug exports have been growing 30 % annually. • The “organized” sector of India's pharmaceutical industry Ranbaxy Daiichi-Sankyo consists of 250 to 300 companies, which account for 70 % of ?Largest in the products on India the market, with the top 10 firms representing 30 nd ? 2 largest in Japan th in largest in the global ?8 percent. ?22nd Largest in the world
general pharmaceuticals ? Serving in over 125 Countries ? Ground operations in 49 countries & Manufacturing in 11 countries. ?Strong R&D Base. ? Operations in 50 countries. ?Producer of high quality drugs
Market Scenario
How
Why
Outcome
? Daiichi-Sankyo acquired 34.8% stake in Ranbaxy on 11th June, 2008 ? Picked up another 9.12% through preferential allotment ? It was an all cash transaction. ? Size of the deal: US$ 4.9 Billion ? As per the deal, total value of Ranbaxy was US $ 8.5 Billion.
Market Scenario
How
Why
Outcome
Market Scenario
Daiichi-Sankyo - Benefits
How
Why
Outcome
• • • •
Strengthen the position of the company. Acquisition will provide low cost manufacturing. Market access to over 60 countries considerable cost savings in their diversification initiatives
Ranbaxy - Benefits
• Company will become one of the top 5 in generic business. • Access to Daiichi’s advanced R & D facilities. • Access to Japanese drug market • Infusion of an additional $ 1 billion into the company. • Surplus cash of Rs.3,000 crores flows in. • The market capitalization goes to $8billion & the net worth goes up.
Market Scenario
How
Why
Outcome
• Ranbaxy has thrived on selling off-patent drugs in the U.S. Much more expensive proposition because of litigation
• Growing competition in generics at home and abroad
• Though Ranbaxy did well this year it missed its 2007 target of becoming a $2-billion company • The R&D pipeline was not delivering enough products, the generic market was not generating adequate returns • Ranbaxy had three choices , It could have spent lots of money in acquiring a big generic company to grow inorganically, merge with a global player, or sell-out.
Market Scenario
How
Why
Outcome
• The sell-out option was the most profitable, both for the promoters as well as shareholder
• Daiichi is a leading, research-based pharmaceutical
company • This deal would enable Ranbaxy to explore their shared capabilities drug development • The investing company shall then be amongst the largest generic manufacturers globally in terms of market share. • Part of the problem, is that generic drug companies in Japan are small and doctors do not trust them, by
effectively rebranding Ranbaxy generics under the well-
Market Scenario
How
Why
Outcome
• A complementary business combination that provides sustainable growth that spans the full spectrum of
pharmaceutical business
• An expanded global reach that enables leading market positions in both mature and emerging markets
• Strong growth potential by effectively managing
opportunities • Competitiveness by optimizing usage of R&D and manufacturing facilities of both companies • It will give Ranbaxy access to Daiichi 's expertise in research while Daiichi will benefit from low-cost
Market Scenario
How
Why
Outcome
• Big threat to the survival of the domestic generic industry • May just dampen the motivation of other Indian aspirants who want to emulate Ranbaxy's success in global Pharma • The acquisition will help Daiichi Sankyo to jump from number 22 in the global pharmaceutical sector to number 15
• Ranbaxy will gain easier access to the much-coveted
Japanese market by operating from within the Daiichi Sankyo fold
• The share price of Ranbaxy rose sharply
• http://www.moneycontrol.com/news/business/daiichiacquires-525ranbaxy_362194.html • http://www.frost.com/prod/servlet/market-insighttop.pag?docid=88873859 • http://www.investopedia.com/university/mergers/mergers 2.asp#axzz1Xwzuwrtw
• http://www.worldpharmanews.com/corporate/1782daiichi-sankyo-a-ranbaxy-announce-a-new-socialcontribution-initiative
doc_452282658.pptx