Announcement regarding merger between Sun Pharma and Daiichi Sankyo’s subsidiary Ranbaxy and resulting change in subsidiary

As announced in a release dated April 7, 2014, pursuant to a merger transaction, whereby Daiichi Sankyo Company, Limited (“Daiichi Sankyo”) has agreed with Sun Pharmaceutical Industries Ltd. (“Sun Pharma”) in favor of Sun Pharma’s acquisition of Ranbaxy Laboratories Limited (“Ranbaxy”), Daiichi Sankyo hereby announces additional information regarding this matter.

I. Merger between Sun Pharma and Daiichi Sankyo’s subsidiary Ranbaxy

1. Purpose of merger

This merger will enable the merged entity to make the significant step of becoming the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India. For Daiichi Sankyo, the merger is an opportunity to pursue new development in its hybrid business model through the new partnership with Sun Pharma.

2. Outline of merger

(1) Main timeframe

• April 6, 2014: Resolutions regarding the merger agreement and other matters made at the Boards of Directors meetings of Sun Pharma and Ranbaxy
• June-end, 2014 ( estimated): Merger approval from Indian securities exchanges
• August-end, 2014 ( estimated): Extraordinary meetings of shareholders at Sun Pharma and Ranbaxy
• December-end, 2014 ( estimated): Merger completed with approval from high courts in India and other regulatory agencies

(2) Merger method

 will be merged with Sun Pharma by means of a share swap.

A merger in which Sun Pharma is the surviving company and Ranbaxy is the company to be absorbed.

(3) Details of allotment associated with merger

0.8 shares of Sun Pharma will be allotted for each share of Ranbaxy.

At present, Daiichi Sankyo owns approximately 63.41% (ratio of voting rights held) of the shares of Ranbaxy. Daiichi Sankyo is scheduled to acquire approximately 9% of the shares of Sun Pharma as a result of this merger.

3. Policy on calculating details of allotment associated with merger

The details were determined through negotiations following valuation work that included financial advisors. Various valuation methods were employed, primarily commonly used ones such as the DCF method and the multiples method. As a result of the valuation, Daiichi Sankyo judged that the share swap ratio (1: 0.8) is an appropriate level.

4. Outlines of companies in merger

(Note) The foreign exchange rate used is the rate as of March-end, 2013 (1 rupee to 1.72 yen).

II. Change in subsidiary
The following change in subsidiary will occur as a result of this merger.
1. Outlines of subsidiaries to change
(Note) The foreign exchange rate used is the rate as of March-end, 2013 (1 rupee to 1.72 yen, 1 US doller to 102.92 yen).

2. Daiichi Sankyo’s ownership of Ranbaxy’s shares before and after change

3. Date of change
December-end, 2014 (estimated)

III. Outlook
The merger is expected to close by the end of December 2014, pending shareholder, court and regulatory approvals and other customary conditions.
Daiichi Sankyo will have the right to nominate one Director to Sun Pharma’s Board of Directors post completion of merger.
Daiichi Sankyo is currently in the process of determining the impact of this transaction on earnings. Daiichi Sankyo is committed to making timely disclosures once details are finalized.