India-based Sun Pharma, an international, integrated, specialty pharmaceutical company, will acquire Ranbaxy Laboratories, an integrated, research-based, international pharmaceutical company, in an all-stock transaction.

The proposal has been unanimously approved by the boards of directors of Sun Pharma, Ranbaxy and Ranbaxy’s controlling shareholder, Daiichi Sankyo. The transaction has a total equity value of approximately $3.2 billion. Daiichi Sankyo will become a significant shareholder of Sun Pharma and will have the right to nominate one director to Sun Pharma’s board.

According to Sun Pharma, the combination of Sun and Ranbaxy will create the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India. The combined entity will have operations in 65 countries, 47 manufacturing facilities across five continents and a significant platform of specialty and generic products marketed globally, including 629 ANDAs. On a pro forma basis, the combined entity’s revenues are estimated at $4.2 billion with EBITDA of $1.2 billion for the 12-month period ended Dec. 31, 2013.

Dilip Shanghvi, managing director of Sun Pharma said,“Ranbaxy has a significant presence in the Indian pharma market and in the U.S., where it offers a broad portfolio of ANDAs and first-to-file opportunities. In high-growth emerging markets, it provides a strong platform which is highly complementary to Sun Pharma’s strengths.”