The Indian government has finally approved the acquisition of Pharmaceutical Major Ranbaxy Laboratories by Japanese drugmaker Daiichi Sankyo.

In June this year, Daiichi Sankyo agreed to buy the 34.8 percent stake held by promoters of the country's largest drug firm Ranbaxy, and made an open offer for a further 20 percent of Ranbaxy shares, as per Indian regulations.

As part of the acquisition, Daiichi would also make an open offer to purchase up to 20 percent of shares in another domestic pharmaceutical firm, Zenotech Laboratories, which is 47 percent owned by Ranbaxy.

The total flow of FDI (foreign direct investment) as a result of acquisition of stocks has been estimated at Rs 21,560 crore.