Sun Shines in Ranbaxy Takeover Bid in Pharma Sector's Largest Merger of the Year

The days are numbered for Ranbaxy, one of the biggest household names in India as far as pharmaceutical companies go. The brand might be on its last legs in the wake of this year's largest merger in the Asian pharma sector.

Sun Pharma is likely to merge the Ranbaxy brand with its own after Monday's conditional nod from the Competition Commission of India (CCI) - a move that will provide the joint entity with a market share of nine per cent in India, reports Business Standard.

One of the key outcomes of the merger would be to create a single brand entity of Sun and the Ranbaxy brand would eventually dissolve, say analysts tracking the company.

"This is the most likely outcome and the merger was proposed keeping this in mind. This would be beneficial over a long term to have a single brand entity," said Sarabjit Kaur Nangra of Angel Broking.

Sun Pharma's managing director Dilip Shanghvi had earlier said during an interview that one of the options for the company was to create a single brand entity.

Retaining an acquired brand for long might prove to be a tough task, especially if it has not been bought purely for its brand strength. Ranbaxy scored heavily in its over-the-counter, or OTC, business, an area where pharma companies get to reach out to the end consumer themselves. Products like Revital (vitamin-based tablets) and Volini (pain reliever) have been endorsed by Bollywood stars.

"These have the equity that Sun would not want to let go of. So sub-brands might be retained after giving a spin to the mother brand," said a marketing expert on condition of anonymity.

Sun Pharma is now closer to being the fifth-largest generic company in the world by annual sales.