In sharp contrast to Europe, India takes the Ranbaxy sale in its stride: maturely and realistically
The Indian Express |
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Enough time has passed, sufficient dust has settled, since last Wednesday8217;s announcement of Ranbaxy8217;s sale of control to Daiichi Sankyo, to conclude that Indian reactions to the deal have been in marked and welcome contrast to reactions to similar sales elsewhere in the world: few nationalistic tears have been shed, even as an industry-leader is sold. And not just the leader of any industry, but of a sector which has been cited as exemplary in its ability to withstand global competition, handle an intellectual property rights regime, transit successfully to a knowledge-based economy and factor in mergers and acquisitions abroad.
Instead, the reaction has focused on the unquestionable positives rather than on intangible negatives. Given the conservative attitudes of Japanese industry, this deal indirectly vindicates Indian pharmaceutical industry8217;s coming-of-age and global recognition 8212; as well as confirming the importance of low-cost generic capability and of marketing networks in the emerging economies of Latin America and Eastern Europe, such as Ranbaxy nurtured.
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The mainstream reaction compares well in particular to reactions in Europe, when European companies are targeted for acquisition by foreigners. The example most familiar is that of the attempted defence of Arcelor from Mittal Steel; but French politicians have gone to the barricades over many others, including Alstom, processed foods giant Danone and, recently, the bank Socieacute;teacute; Geacute;neacute;rale. There has been no political reaction here: in France, the authorities have been accused of forcing through mergers between French companies, such as that which created the pharmaceutical major Sanofi-Aventis, to make them less vulnerable to foreign capital. Even in liberal Sweden, there was an outcry when Absolut was being sold to 8212; ironically 8212; a French buyer. India8217;s comparative unconcern is fortunate, as more such mergers and acquisitions should follow, and not just in pharmaceuticals but in other sectors as well. Mergers and acquisitions are standard commercial practice and merits are for the concerned stakeholders to assess, barring examples where competition policy is attracted. If the Indian reaction has displayed more maturity than the European, that too is welcome, and overdue.
