By IANS,
New Delhi : Japanese drug maker Daiichi Sankyo was Thursday placed on watch by global ratings agency Moody’s, a day after the company announced a $4.6-billion deal to buy majority stake in India’s largest pharmaceuticals company Ranbaxy Laboratories.
Moody’s Investor Service said the transaction could meaningfully affect Daiichi Sankyo’s net cash position. At the same time, the agency said the deal would enhance its growth potential, especially in generics and emerging markets.
The review of Daiichi Sankyo’s Aa3 rating will focus on the potential impact of the merger on its competitiveness and business strategy. It will also re-address the company’s financial policy.
“Moody’s believes the possibility of a multi-notch downgrade to Daiichi Sankyo’s final rating is very limited because the company has ample liquidity to support the major part of the financing of the acquisition,” the agency said.
“Its strong cash flow from operations may also allow it to restore its financial profile once the acquisition has been completed.”
The mega deal – the largest in India’s $7.3 billion pharmaceutical industry – is estimated to value Ranbaxy at $8.9 billion and catapult the
combined entity as the world’s 15th biggest drugs maker from the current 22nd position.