Merger Remedies: Emcure buys 7 brands Sun-Ranbaxy

Sun Ranbaxy Combination: Emcure buys 7 brands Sun-Ranbaxy: Final Approval of CCI

·         The CCI cleared the merger subject to the condition that both companies would have to divest certain products to address monopoly concerns.

·         This clears the way for creating the biggest drug company in India with a market share of 9% and the fifth largest generic drug firm in the world. Sun had in April last year agreed to acquire Ranbaxy in a $4-billion all-stock deal.

·         The Competition Commission of India (CCI) has given final clearance to Sun Pharmaceutical-Ranbaxy Laboratories merger, approving divestment of seven overlapping drugs of the two companies to Emcure Pharmaceuticals.

Table: Seven products to divest include:

Sr. No.	Brand	Molecule	Therepeutic Use	Remarks
1.	Tamlet	(tamsulosin/tolterodine)	Symptomatic treatment of benign prostatic hyperplasia (BPH).	Tamsulosin was developed by Yamanouchi Pharmaceuticals (now part of Astellas Pharma) and is marketed by various companies under licence, including Boehringer-Ingelheim and CSL.
2.	Eligard	(leuprorelin)	advanced prostate cancer
3.	Terlibax	(terlipressin)	norepinephrine-resistant septic shock and hepatorenal syndrome
4.	Rosuvas EZ	(rovustatin/ezetimibe)	used to treat high cholesterol and related conditions, and to prevent cardiovascular disease.	Shionogi developed the product and the pharmaceutical company AstraZeneca markets it as Crestor. In India, Rosuvastatin is marketed as Rozavel by Sun pharma
5.	Triolvance	(amlodipine/olmesartan/hydrochlorothiazide)	treat high blood pressure and chest pain or pressure (angina)

         Source: Self compiled.

·         The CCI evaluated 49 drugs, with the companies 7 of those to be disposed of represent less than 1 percent of the combined entity's revenues in India. The drugmakers have been given six months to complete the divestitures.

·         Competition Commission of India had appointed PwC as a monitoring agency for the divestment process. The brands CCI had identified included Tamlet, Rosuvas EZ, Eligard, Terlibax, Olanex F, Raciper L and Trioolvance.

·         Both companies were also required to extend transitional support in order to ensure the continued supply of the divested products in the relevant markets.

·         Interestingly, Emcure states that it did not require any transitional support.

·         PwC has concluded that Emcure as a potential purchaser is likely to be a viable, independent and effective competitor in the relevant markets pertaining to the divestment products.

·         Therefore PwC recommended that the purchaser proposed by the parties meets the purchaser requirements provided in the order.

·         The CCI order states that the order shall stand revoked if, at any time, the information provided by the parties or Emcure is found to be incorrect.

·         CCI observed that Emcure is a company active in the sales and marketing of pharmaceutical products in the India and has the financial resources, proven expertise, manufacturing capability or ability to outsource manufacturing and incentive to maintain and develop the divestment products, as a viable and active competitor to the parties in the relevant market.