Japanese acquisition in India's Ranbaxy
Abstract
Purpose
The purpose of this paper is to examine the rationale and synergies of a Japanese firm's acquisition of India's leading pharmaceutical firm, Ranbaxy, and to answer the following pertinent questions: could Ranbaxy have been able to survive and succeed, had the firm not gone for this strategic sale to a foreign firm? What is the rationale for this strategic sale immediately after undertaking many major acquisitions during the previous two‐year period? For what strategic reasons did a Japanese firm pay a premium price for this international acquisition?
Design/methodology/approach
An exploratory method was used in this study to analyze the rationale and synergies of the acquisition. The method of case writing has been followed as a design (case situation first, then goes back to the past, then comes back to the current situation).
Findings
The findings confirm that Ranbaxy got a premium price for agreeing to be acquired for their share (much higher price than the market price). Japanese firm Dai‐Ichi got greater market access and control of Ranbaxy, which were driving factors for them to pay a higher share price for Ranbaxy.
Originality/value
This original study gives insight into the points to be taken into consideration while thinking about international acquisitions.
Keywords
Citation
Paul, J. and Bhawsar, P. (2011), "Japanese acquisition in India's Ranbaxy", Competitiveness Review, Vol. 21 No. 5, pp. 452-470. https://doi.org/10.1108/10595421111171957
Publisher
:Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited