The Competition Commission of India (CCI) is investigating the combination between Sun Pharmaceutical Industries (Sun Pharma) and Ranbaxy Laboratories (Ranbaxy).

Both parties have agreed that Ranbaxy will merge into Sun. The resulting merged enterprise is referred to as the combined entity.

As a result of the proposed transaction, Sun would be indirectly acquiring Ranbaxy's shareholding of 46.79 % in Zenotech Laboratories and has announced an open offer for 28.1% shares of Zenotech through the public announcement dated Apr. 11, 2014 to be commenced after completion of the Sun-Ranbaxy merger.

Sun and Ranbaxy have been asked by the regulator to publish details of the deal within 10 working days on their websites as well as in four national newspapers. The CCI also sought comments or objections from the public on the proposed deal.

The proposed merger would create the 5th largest global specialty generics company. The combined entity would thereby be able to compete in the global speciality generics market on an equal footing.

The combined entity will have a diverse, highly complementary portfolio of specialty generic products targeting a spectrum of chronic and acute treatments across diverse geographies including India, USA and other international markets.

The proposed merger would create an opportunity for the shareholders of both Sun and Ranbaxy to participate in value creation in the Combined Entity.

The proposed transaction contemplates the merger of Ranbaxy into Sun pursuant to the Scheme of arrangement (scheme) which has been approved by their respective Board of Directors under the Sections 391-394 and other applicable provisions of the Companies Act, 1956 (as amended).

The amalgamation/merger will need approval by majority in number representing 75% in value at the shareholders' meetings of each of Sun and Ranbaxy.

As per the Scheme, it is proposed that the shareholders of Ranbaxy (Ranbaxy shareholders) would receive 0.8 shares of Sun for each share of Ranbaxy that they own.

Post the proposed transaction, the Ranbaxy shareholders, are expected to own approximately 14% of the combined entity on a pro forma basis with Daiichi holding 8.9% of the combined entity and the promoter group of Sun is expected to own approximately 54.7% of the combined entity.

Shares of Sun Pharmaceutical Industries declined Rs 6.35, or 0.73%, to trade at Rs 858.30. The total volume of shares traded was 46,198 at the BSE (10.27 a.m., Friday).