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Japanese pharma major Daiichi Sankyo has completed the purchase of 20% stake in Ranbaxy Laboratries through the public offer. The stake has been purchased for Rs 6,818 crore at a price of Rs 737 per share.

However, the deal between the promoters (the Singh family of Ranbaxy) and Daiichi Sankyo is yet to be concluded since the Singhs are looking at a tax-efficient transaction route. The sale of 34.82% stake of the Singhs would be worth Rs 9,576 crore which if it's done via an off-market transaction, it would result in capital gains tax (10%) and surcharge liabilities of close to Rs 1,000 crore.

If the transaction is done via bulk deal on bourses, then it would attract only securities transaction tax of 0.125% in addition to broker's fee and 12.5% service tax on the broker's fee. This would have meant a tax of few crores of rupees.

But market regulator Securities and Exchange Board of India (SEBI) has refused the stake sale of promoter's holding through bulk deals on the bourses.

Daiichi Sankyo's acquisition of Ranbaxy involved acquisition of stake in the latter through combination of four steps - (i) purchase of shares held by the Singh family, who have a 34.82% stake, (ii) preferential allotment of equity shares, (iii) subscription of warrants, and (iv) open offer for 20% stake, mandatory under SEBI rules. The final step of the deal is done, but the first step now seems to be in a limbo.

Life Insurance Corp of India (LIC), which holds a 15% stake in Ranbaxy, has sold off a 6.91% stake in the public offer. Ranbaxy's share price has closed at Rs 256 today, which is much lower than its offer price of Rs 737.

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