India’s Sun Pharmaceutical has agreed to acquire rival Ranbaxy – majority owned by Japan’s Daiichi Sankyo – in an all-stock deal worth $4bn (£2.4bn).
The combined entity will be India’s largest pharma company and the world’s fifth-biggest generic drugs maker.
It comes at a time when Ranbaxy is under the scrutiny of US regulators who have imposed import bans on drugs manufactured at some of its facilities.
The agreement still needs shareholder and regulatory approvals.
“Ranbaxy has a significant presence in the Indian pharma market and in the US,” Dilip Shanghvi, managing director of Sun Pharma said in a statement.
“In high-growth emerging markets, it provides a strong platform which is highly complementary to Sun Pharma’s strengths.”
Earlier this year, the Food and Drug Administration (FDA) banned Ranbaxy from producing and distributing drugs for the US market from its Toansa facility in Punjab – the company’s fourth facility to face such a ban.
The US drug regulator said there had been “significant” manufacturing violations at the facility.
It alleged that staff had conducted tests on materials that had already failed initial tests “in order to produce acceptable findings”.
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