MUMBAI – India's Sun Pharmaceutical Industries Ltd Managing Director Dilip Shanghvi said he expects Ranbaxy Laboratories Ltd to become profitable in the short term.
Sun said it will buy Ranbaxy 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 plants, Shanghvi told analysts on a conference call.
Ranbaxy's underlying business has "robust growth," and profitability potential, based on which the price Sun is paying for the deal is "justified," Shanghvi said.
The managing director also said Sun would continue to look for acquisition opportunities even after the Ranbaxy acquisition.
(This version of the story corrects the first and last paragraphs to say Dilip Shanghvi is managing director, not chairman of Sun Pharma.)
(Reporting by Zeba Siddiqui; Editing by Anupama Dwivedi)