Sun Pharma tanks as Daiichi starts divesting $3.6B in stakes
- In 2008, Japan's Daiichi Sankyo purchased Indian generics maker Ranbaxy in an attempt to carve a foothold in the generics market, before selling the troubled company to Sun Pharma last year for $3.2 billion and an 8.9% stake in the new Sun.
- Daiichi has now decided to sell off up to $3.2 billion in its stakes in Sun, which completed its Ranbaxy acquisition last month.
- Although Daiichi did not say so directly, the ongoing quality-control problems at Ranbaxy, which is now part of Sun, are most likely the driving force behind the sale. Sun's shares are down about 9% on news of the selloff.
Daiichi selling off its shares on Monday, according to Reuters, shortly after Sun Pharma completed its acquisition of Ranxbaxy in March. Daiichi has watched the value of its stake in its investments in India fall by 50% as the Indian pharmaceutical industry faces a series of quality-related setbacks and sanctions, which have a direct impact on sales.
On March 31, Daiichi will announce fiscal year results, at which point it will disclose more financial details about the Sun stock sale.