Tokyo/New Delhi - Japan's pharmaceutical Daiichi Sankyo Co reached an agreement with India's Ranbaxy Laboratories to acquire a majority stake, the Japanese company announced Wednesday.

The acquisition was estimated to be worth between 3.4 and 4.6 billion dollars.

Daiichi Sankyo intends to boost cost competitiveness in effective use of manufacturing as well as research and development facilities, especially in India, through the acquisition, the company said.

"While both companies will closely cooperate to explore how to fully optimize our growth opportunities, we will respect Ranbaxy's autonomy as a standalone company as well," Daiichi Sankyo Co President & CEO Takashi Shoda said in a statement.

Under the deal, Daichi would acquire 34.82 per cent stake of Ranbaxy and make an open offer in accordance with regulatory requirements at a price of 737 rupees per share.

The purchase price represents a premium of 53.5 per cent to Ranbaxy's average daily closing price on India's National Stock Exchange of the three months ending June
10, 2008, Ranbaxy said in a statement issued in New Delhi.

The transaction was expected to be completed by the end of March 2009, upon which Ranbaxy would become a subsidiary of Daiichi Sankyo.

Malvinder Mohan Singh will continue to lead the company as its CEO and managing director and will additionally assume the position of the Chairman of the Board, upon closure, Ranbaxy said.

Commenting on what is the largest deal in India's pharmaceutical industry, Singh described it as a "path breaking deal" that will "redefine India's pharmaceuticals landscape."

"Together with our pool of scientific, technical and managerial resources and talent, we would enter a new orbit to chart a higher trajectory of sustainable growth in the medium and long term in the developed and emerging markets organically and inorganically," Singh said. (dpa)