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RATIONALE BEHIND

RANBAXY

DAIICHI-SANKYO

DEAL

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Company profile of Ranbaxy:Established in 1937 by Ranjit Singh and Gurbax SinghIndiaslargest pharmaceutical companyRanked amongworldstop 10 generic companyIt has a presence in 23 of worlds top 25 pharmaceutical market withexport in over 125 countries

Strengths of Ranbaxy:Cost effective technology

Drug delivery system management

Production of generic drugs

Pharmaceutical ingredients ( apis) future growth drivers

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Company profile of Daiichi sankyo:

Established in Sept. 28th2005.(JAPAN)CEO :TAKASHI SHODA

Workforce : 16,237 People.

Major Industry : Ethical Drug Manufactures.

Annual Sales in FY07: US$ 8.7 Bn

Strengths of Daiichi sankyo :Japans second largest drug maker company

Ranked 22nddrug maker in the world

Providing a stable supply of top-quality pharmaceutical

products

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Rationale of the deal:From Daiichi sankyo perspective:

Achieving mid-term management plan.

Broader product base and well distributed risks.

Ranbaxys addition can boost Daiichi Sankyos position from #22 to #15 by

market capitalization in the global pharmaceutical market.

Daiichi Sankyo expects that its return on equity will increase from 6% to10% in fiscal 2010 as a result of the merger.

The most important benefit for Daiichi Sankyo will be the access that itwill gain to Ranbaxys presence in 21 emerging markets, out of the total of 40locations where it is operating.

Daiichi Sankyo seeks to exploit Ranbaxys entire value chain

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Rationale of the deal (contd.):Ranbaxy envisages a broader product portfolio for itself as a result of the

merger.

The company will be free of existing debt as Daiichi Sankyo will be pooling

financial resources towards re-financing its entire debt.

Subsequently, Ranbaxy expects to have approximately $700 million (INR3000

crores, exchange rate: 1USD=42.8INR) as cash surplus, which increases its bookvalue per share from $1.7 to $4.7. Ranbaxy believes that a stronger balance sheet

will allow the company more flexibility to pursue organic as well as inorganic

growth opportunities to enhance its branded drugs business and move up the

pharmaceutical value chain.

As regards markets, the biggest gain for Ranbaxy is its smoother access to theJapanese market, being part of Daiichi Sankyo.

Equally important for Ranbaxy is to become the largest player in Japans generic

drugs market, for which the company is eyeing organic and inorganic routes.

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Rationale of the deal (contd.):

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