Daiichi gets green signal to buy into Ranbaxy

Mumbai Japanese drug maker Daiichi Sankyo Co will soon begin proceedings to acquire Ranbaxy Laboratories, the Indian generic drug major.

Sources confirm that Daiichi has received clearance from the Foreign Investment Promotion Board (FIPB) for the deal.

The Japanese firm was to launch the offer for 20 percent of Ranbaxy on August 8, but said on July 31 that the schedule had been delayed.

The delay was due to market regulator Securities and Exchange Board of India (SEBI), which had not approved the proposed deal by then.

Now SEBI has given its go-ahead for the open offer. An official announcement is expected within two days though both companies were not available to comment right away.

Reports suggest that Daiichi Sankyo's open offer for Ranbaxy will start on August 16, and close on September 4th.

Daiichi is set to acquire 34.8 percent from Ranbaxy's founding family, as agreed upon in June.

In this case promoters and brothers Malvinder and Shivinder Singh hold the crucial stake in Ranbaxy.

Daiichi is expected to make an open offer for a further 20 percent at 737 rupees a share.

With the SEBI and FIPB approvals in, Daiichi can proceed with pumping in over$4.6 billion in the Indian drug major.