India has approved Japanese drugmaker Daiichi Sankyo's investment in India's Ranbaxy Laboratories, Finance Minister Palaniappan Chidambaram told reporters after a cabinet meeting on Friday.
Daiichi Sankyo agreed in June to buy the 34.8 per cent stake held by Ranbaxy's founding family, and made an open offer for a further 20 per cent of Ranbaxy shares, as per Indian regulations, that was oversubscribed.
"The total flow of foreign direct investment as a result of the acquisition of shares will be estimated at 215.60 billion rupees ($4.6 billion)," Chidambaram said.
Shares in Ranbaxy were up 6.3 per cent at 267.50 rupees by 0856 GMT. The shares are still trading 64 per cent below Daiichi's offer price of 737 rupees.
Daiichi would also make an open offer to buy up to 20 per cent of shares in another Indian firm, Zenotech Laboratories, which is 47 per cent owned by Ranbaxy.
"The inflow from the acquisition of Zenotech shares has not yet been determined. That will also be quite significant," the finance minister said.
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