TOKYO (AP) -- Japanese pharmaceutical company Daiichi Sankyo Co. said Wednesday it will buy a controlling stake in India's largest drug maker Ranbaxy Laboratories Ltd. in a tender offer worth as much as $4.6 billion.
Daiichi Sankyo, which has seen its business growth slow in mature markets, should be more able to expand business in emerging markets including India, China, Russia and Brazil.
Adding Ranbaxy's network, Daiichi Sankyo can more than double its global reach from the current 21 countries to 56, the Japanese company said.
The deal also allows Daiichi Sankyo to expand its operation in generic drug production and sales to ''adapt to rapidly-changing market needs.'' Ranbaxy is a major producer of generic drugs.
The agreement allows Daiichi Sankyo to buy at least 50.1 percent of the Indian generic drug maker's voting rights in the tender offer through March 2009, the Japanese company said in a statement.
The Tokyo-based company and Ranbaxy said in a joint statement that they have agreed on the offer through March 2009 at 737 Indian rupees ($17.10) for each Ranbaxy share, a 31 percent premium to their closing price Tuesday.
Daiichi Sankyo said in a statement it expects to spend between $3.4 billion and $4.6 billion in the tender offer and will use its cash and bank lending to finance the share purchase.
Sankyo said Ranbaxy will become a subsidiary when the deal is completed. Ranbaxy Chief Executive and Managing Director Malvinder Mohan Singh will remain his current post.
The two companies said in a joint statement that the deal would also benefit them with strong growth potential and cost competitiveness.
The proposed transaction ''provides the opportunity to complement our strong presence in innovation with a new, strong presence in the fast growing business of non-proprietary pharmaceuticals,'' said Daiichi Sankyo President and Chief Executive Takashi Shoda in a statement.
Singh said Ranbaxy's association with Daiichi Sankyo ''puts us on a new and much stronger platform to harness our capabilities in drug development, manufacturing and global reach.''