Daiichi Sankyo to Sell Sun Pharma Stake

NEW DELHI--Daiichi Sankyo Co. plans to sell its stake in Sun Pharmaceutical Industries Ltd. as it seeks to exit an investment that soured over seven years.

The century-old Japanese drug firm plans to sell some or all of its 8.9% stake in Sun Pharma--which it received after selling Sun Pharma its trouble Indian subsidiary, Ranbaxy Laboratories Ltd. last April for $3.2 billion in an all stock deal--Daiichi Sankyo said in a press release.

The stake sale comes seven years after Daiichi Sankyo acquired a controlling stake in Ranbaxy for $4.6 billion. Sun Pharma completed the acquisition of Ranbaxy last month.

Ranbaxy began having problems with U.S. regulators for manufacturing violations soon after Daiichi Sankyo purchased the firm. Ultimately, the U.S. Food and Drug Administration barred almost all of Ranbaxy's factories from exporting to the U.S., the source of its biggest chunk of revenue.

At the time of the sale, Daiichi Sankyo chief executive Joji Nakayama said the deal would "help accelerate a solution to the series of problems at Ranbaxy."

Daiichi said in its press release that it would continue its business relationship with Sun Pharma. The two companies plan to sell each other's products in emerging markets.

Write to Sean McLain at [e-mail]

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