Mumbai: Shares of Ranbaxy Laboratories Monday ended nearly 4 percent lower after Sun Pharmaceutical Industries announced it will fully acquire the struggling company in an all-stock transaction valued at USD 3.2 billion.
After falling 5.54 percent to Rs 434.05 in intra-day trade on the BSE, shares of Ranbaxy Lab ended 3.12 percent lower at Rs 445.20.
On the NSE, the stock settled 3.58 percent down at Rs 443.10.
On the other hand, shares of Sun Pharma rose 2.68 percent to close at Rs 587.25 on the BSE.
Sun Pharma and Ranbaxy said they will become the largest pharmaceutical company in India, with an estimated combined revenue of USD 4.2 billion, and the fifth-largest speciality generics company in the world.
Ranbaxy, controlled by Daiichi Sankyo of Japan, is struggling with quality compliance issues as all four of its plants in India have been banned by the Food and Drug Administration from exporting products to the US. Sun's Karkhadi plant is also barred from shipping products to the US for violation of good manufacturing norms.
As per their agreement, Ranbaxy shareholders will get 0.8 share of Sun Pharma for each share of Ranbaxy, representing an implied value of Rs 457 for each Ranbaxy share.
This is at a premium of 18 percent to Ranbaxy's 30-day volume-weighted average share price and a premium of 24.3 percent to Ranbaxy's 60-day volume-weighted average share price, in each case, as of the close of business on April 4, 2014.