Mergers, Acquisitions and Takeovers Case Study

Ranbaxy's Acquisition of Terapia: Creation of the Largest Generic Company of Romania

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Abstract:

In March 29, 2006, Ranbaxy Laboratories Limited, the leading pharmaceutical and generic drug company of India, announced that it would acquire Terapia, the largest independent generic company of Romania. Ranbaxy announced that it would acquire 96.7% of Terapia at USD 324 million from its parent investing company, Advent International. The deal, expected to be completed within the second quarter of 2006, was valuable for Ranbaxy. With the US generic market gradually shrinking, a number of governmental regulations to be adhered to, and the price erosion in the market, Ranbaxy had to shift its focus to Europe. With a considerable foothold over the country’s generic market, Ranbaxy intended to cross the threshold of the other high growth generics markets of Europe.

The case focuses on Ranbaxy’s inorganic growth strategies and the various market factors that it considered while entering the lucrative generic market of Romania. It also provides a brief description of the US, European and the Romanian generic market. Such information, coupled with the company backgrounds of the two companies, would help in analysing Ranbaxy’s chances of establishing a strong foothold over the Romanian and subsequently the European generic market.

Pedagogical Objectives:

• To discuss the European Generic pharmaceutical market
• To discuss Ranbaxy’s inorganic growth strategies and the various market factors that it considered while entering the lucrative generic market of Romania
• To discuss the possible synergies and challenges of the acquisition.

Keywords : Mergers,Acquisitions,Alliances Case Study;Ranbaxy Laboratories Limited; Terapia SA; Romanian generic market; European generic market; US generic market; US FDA (United States Federal Drug Administration); Integrated distribution network; Low cost clinical trials; Para IV filing; Bio equivalence; Merger and acquisition; Inorganic growth strategy; Product portfolio; Work culture

Contents : 
Ranbaxy Laboratories Limited
Synergies Of The Acquisition
The Global Sales Figure Of Ranbaxy
The Distribution Network Of Terapia
The Generics Market Potental Of Romania