Ranbaxy drops Merck bid
India’s largest pharmaceuticals company by sales, Ranbaxy Laboratories Ltd, reported out to be out of the race to acquire the generic drug business of Merck KGaA of Germany. Over valuation is said to be the cause of Ranbaxy stepping back. Ranbaxy Laboratories Ltd, was believed to be the only Indian company left in the race, and had reached Round 2 of the bidding process.
Ranbaxy Laboratories Ltd, spokesman said that Ranbaxy can neither deny nor confirm the move to pull our of the Merck acquisition race. He cited confidentiality agreement for not being in a position to confirm the move. The top level sources said that Ranbaxy Laboratories Ltd, which had made it to the second round of bidding, decided to pull out after the valuations was too strtched at over $6.5 billion.
A source close to the developments said, that more information was available to the bidding companies, which helps them make better evaluation and judgement. Sources pointed out that an auction at this stage could easily take the valuationhs to over $6.5 billion.
They pointed out that the companies which still remain in the fray would submit the second round of bidding and may also go for an auction. Ranbaxy Laboratories Ltd, scrips have reacted positively on the news of Ranbaxy not going in for an over priced acquiaition deal.
