Japan’s Daiichi Sankyo, the new owner of India’s largest drugmaker Ranbaxy Laboratories, expects a non-cash valuation loss of $3.9 billion on its acquisition of the Indian company for the third quarter ended December 31. Daiichi Sankyo said that this would affect the company’s consolidated net income for the financial year ending March 2009 though it is yet to ascertain the impact. On a non-consolidated basis, Daiichi Sankyo plans to record a non-cash valuation loss of 359.5 billion yen on its shares in Ranbaxy in its fiscal third-quarter to reflect a more than 50% decline in the market value of these securities versus the purchase price.
Last year, Daiichi Sankyo paid Rs 737 per share, or about $4 billion, to buy 63.9% stake in Ranbaxy. But the Indian company’s shares have fallen to almost a third of the purchase price due to the global financial meltdown.
Daiichi Sankyo said that its forecasts for non-consolidated net sales, operating income or cash flows for the third quarter will not be impacted because of the anticipated extraordinary losses. But, these items would adversely impact the company’s consolidated financial results forecasts for net income for the nine-month period ended December 31, 2008 and for fiscal year 2008-09.