Daiichi says Ranbaxy acquisition will hit its bottomlineJanuary 5th, 2009 - 4:21 pm ICT by IANS
New Delhi, Jan 5 (IANS) Japanese drug maker Daiichi Sankyo will take a hit on its books owing to its acquisition of Indian pharmaceutical major Ranbaxy Laboratories, a Daiichi company statement said Monday.In the statement, Daiichi Sankyo also said it planned to record a valuation loss and one-time write down of goodwill on its investment in the now group subsidiary Ranbaxy.
On a consolidated basis, Daiichi estimates a non-cash loss of 354 billion yen related to the write-down of goodwill associated with its investment in the indian company in line with the valuation loss on Ranbaxy shares accounted for on a non-consolidated basis.
However, the company clarified that this would not have an impact on its forecasts for net sales, operating income or its cash flow for the third quarter fiscal.
The company also said the step was taken to meet the strictest accounting standards to ensure it remains on a firm financial footing and considers its investment in Ranbaxy as essential in ensuring business growth.
Last month, the board of the Indian pharma major was reconstituted following the strategic alliance with Daiichi Sankyo, with the former Ranbaxy chief executive and managing director Malvinder Mohan Singh being nominated as the new entity’s chairman.
Daiichi Sankyo holds 63.92 percent of the Indian company’s equity share capital.