Sun Pharma and Ranbaxy on Monday got the Competition Commission of India’s (CCI) approval for their long-pending $4-billion merger, but with a condition that they would have to modify the deal by divesting seven key products to address monopoly concerns.
The regulator, which has ordered Ranbaxy to sell six products and Sun to divest one, will also appoint a monitoring committee to oversee compliance to the conditions put forth by it to ensure that the merger does not hit competition.
The approval comes within days of clearance from the Foreign Investment Promotion Board (FIPB) for the deal that was announced in April, and would create India’s largest and world’s fifth biggest drug-maker.
Besides, this was the first case which the CCI subjected to a public scrutiny process as it had found the deal ‘prima facie’ in violation of the competition laws.
In its order, dated December 5 and made public on Monday, the CCI said, it “approves the proposed combination... subject to the parties carrying out the modification to the proposed combination.’’
The CCI has directed Sun Pharma to divest all products containing ‘Tamsulosin + Tolterodine’, which are at present marketed and supplied under the Tamlet brand name.
Similarly, Ranbaxy would be required to divest all products containing Leuprorelin, which are marketed and supplied under the Eligard brand name.
Ranbaxy would also have to divest products such as Terlibax, Rosuvas EZ, Olanex F, Raciper L and Triolvance.
According to the fair trade watchdog, the modification to the proposed deal aims “to maintain the existing level of competition in the relevant markets in India.’’
The merged entity would have operations in 65 nations, 47 manufacturing facilities across 5 continents, along with a global portfolio of speciality and generic products.
