India's Sun Pharma expects Ranbaxy Laboratories business to be profitable in short term

Reuters Posted online: Monday, Apr 07, 2014 at 0000 hrs
Mumbai : India's Sun Pharmaceuticals Industries Ltd Chairman Dilip Shanghvi said he expects Ranbaxy Laboratories Ltd to become profitable in the short term.

Sun said it will buy Ranbaxy Laboratories in a $3.2 billion all-share deal, creating the world's fifth-largest generic drug maker from two firms struggling with quality issues in the lucrative United States market.

Sun plans to focus on remediation of compliance issues that have resulted in bans at multiple Ranbaxy Laboratories plants, Shanghvi told analysts on a conference call.

Ranbaxy Laboratories' underlying business has "robust growth," and profitability potential, based on which the price Sun is paying for the deal is "justified," Shanghvi said.

The chairman also said Sun would continue to look for acquisition opportunities even after the Ranbaxy Laboratories acquisition.