FTC puts conditions on Sun Pharma's proposed acquisition of Ranbaxy

Indian drugmakers Sun Pharmaceutical Industries (BSE: 524715) and Ranbaxy Laboratories (BSE:500359) have agreed to divest Ranbaxy’s interests in generic minocycline tablets in order to settle US Federal Trade Commission charges that Sun’s $4 billion proposed acquisition of Ranbaxy would likely be anticompetitive.

Torrent Pharmaceuticals (BSE: 500420), a global drug company based in India that markets generic drugs in the United States, will acquire the divested assets.

According to the FTC’s complaint, the proposed merger would likely harm future competition by reducing the number of suppliers in the US markets for three dosage strengths (50mg, 75mg, and 100mg) of generic minocycline tablets. Ranbaxy is currently one of three suppliers of the products, while Sun is one of only a limited number of firms likely to sell generic minocycline tablets in the United States in the near future. Sun’s entry likely would have resulted in significantly lower prices for these drugs.