Sun Pharmaceuticals Industries will buy struggling generic drug maker Ranbaxy Laboratories in an all-stock transaction for an equity value of USD 3.2 billion which will make it the largest pharmaceutical company in India and also the fifth largest in the world.

"Sun Pharmaceutical Industries Ltd and Ranbaxy Laboratories Ltd today announced that they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100 per cent of Ranbaxy in an all-stock transaction," the two companies said in a statement.

This is biggest deal in two years and shares of Sun Pharma and Ranbaxy gained well in the stock exchange today post deal announcement.

Ranbaxy Laboratories is banned from exporting drug ingredients to the United States, while Sun Pharmaceutical’s Karkhadi plant is also barred from shipping products by the US Food and Drug Administration. In addition to this, US Attorney’s Office in New Jersey had issued an administrative subpoena to Ranbaxy seeking information related to the company’s Toansa plant in India.

(AW: Vamshi)