Indian court ruling lifts temporary stay on Sun Pharma takeover of Ranbaxy

Indian generics drugmaker Sun Pharmaceuticals’ (BSE: 524715) proposed $3.2 billion acquisition of loss-making rival Ranbaxy Laboratories (BSE: 500359) looks more likely to proceed after an Indian court lifted the temporary halt to the takeover due to allegations of insider trading (The Pharma Letter May 5).

The Andhra Pradesh High Court on Saturday vacated stay orders it issued last month on the merger of two firms that would create world's fourth largest medicines producer, reported the Economic Times of India. The order has now been lifted with the Securities and Exchange Board of India (SEBI), which is now set to investigate the matter. Sun Pharma shares gained as much as 3.9%, while Ranbaxy jumped as much as 4.5% on the news, according to Reuters.

The vacation court Judge G Chandraiah heard on Friday the arguments of petitioners and respondents on a petition filed by Japanese drugmaker Daiichi Sankyo (TYO: 4568), the majority owner of Ranbaxy which had agreed to sell its stake to Sun, challenging the stay orders on merger. He pronounced orders Saturday vacating the status quo order the court issued last month.