The Sun Pharmaceutical Industries Ltd is definitely going to have tough time ahead. The Japan based Daiichi Sankyo Company Ltd is about to sell its stake in the Indian pharmaceutical giant. The Daiichi will be selling shares with market valuation of around $3.6 billion. The U.S. Food and Drug Administration (FDA) slapped sanctions on the Indian drug companies. This alarmed the Daiichi officials as they bought Randbaxy Laboratories back in 2008. The company expected higher returns from these pharma investments in India as the global demand for generic drugs went on increasing. The sanctions by FDA have now jeopardized Japanese investment in India. The signs of globally connected economy are clearly visible through this.
Sun Pharmaceuticals are based in Mumbai, India’s commercial capital and the corporation is largest drug manufacturer in India as per the sales share. The Sun Pharma bought Ranbaxy from the Japanese company last year for the value of $3.2 billion. During negotiations, Daiichi Sankyo received 8.9 percent stake in the newly formed Sun Pharma. The person close to the Daiichi management informed agencies that Daiichi has started going ahead with selling process of that particular stake since Monday.
The move comes after the acquisition process of the Ranbaxy was completed by the Sun Pharma in March. The existing business relations with Sun Pharma will remain same, according to the Daiichi official. The company didn’t clarify about the reason behind the sale. The board recently approved the decision of sell by the management. The FDAs concerns over the manufacturing processes in India has indirectly triggered this decision.