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Sun Pharma and Ranbaxy have got approval from the Competition Commission for sale of seven brands to Emcure Pharma to comply with the fair trade watchdog’s conditional nod for their USD 4-billion merger.
In an order issued today, CCI also approved the deal with Emcure, which would purchase the
‘divestment products’ that were ordered to be sold in an earlier
direction issued in December last by the Competition Commission of India(CCI).
These seven brands were
at the core of the CCI’s contention that the merger between Sun
Pharmaceutical Industries and Ranbaxy Laboratories was ‘prima-facie’ in
violation of competition laws and therefore the regulator had ordered
divestment of those products under its ‘conditional’ approval to the deal.
Despite sale of these products, the merger would create India’s largest and the world’s fifth largest drugmaker.
The ‘conditional’ approval was given by CCI on December 5, 2014 after a public scrutiny of the deal. Consequently, the two companies were asked to identify a purchaser for the seven brands to be divested.
CCI had also appointed PwC as a monitoring agency for the divestment process.
“The Commission considered the reports submitted by the Monitoring Agency and the Proposal along with all information submitted by the parties and Emcure, inorder to assess whether Emcure meets the requirements laid down in the orderand whether the APA (Asset Purchase Agreement)
and the SA (Supply Agreement) proposed to be entered into by the
Parties and Emcure, are in accordance with the provisions of the Order,” CCI said.
The regulator said that it has found Emcure to be “a company active in the salesand 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”.
Accordingly, CCI has approved “Emcure as the Approved Purchaser of the Divestment Products”.
In December, CCI had directed Sun Pharma to divest all products containing ‘Tamsulosin + Tolterodine’ which are marketed and supplied under the Tamletbrand name.
Similarly, Ranbaxy was directed to divest all products containing Leuprorelin which are marketed and supplied under the Eligard brand name.
