India's largest drug maker by market value, Sun Pharmaceutical Industries has indicated that it is planning to buy Ranbaxy Laboratories in a deal valued at $3.2 billion in stock.

The acquisition will be the biggest by any Indian company in two years. Under the terms of the deal, Ranbaxy investors will get 0.8 share in Sun for every one share in Ranbaxy, the two pharmaceutical giants said in a statement. The deal values the shares at about 457 rupees a share, or about 24 percent higher than the 60-day average.

Following the acquisition, Sun Pharma will be able to get control of Ranbaxy's pipeline of generic products and also allow it to expand in emerging markets including Russia and Brazil. Along with the transfer of debt, the entire deal is valued at $4 billion, according to Sun Pharma. It also said in a statement that it expects $250 million in revenue and reduced costs by the third year after the completion of the deal.

Japan's Daiichi Sankyo Co. Ltd, which owns 63.5 percent of Ranbaxy Laboratories Ltd, has indicated that it will vote in favour of the deal. The Japanese company has indicated that it will not be involved directly in the business in India.

Sun Pharma shares rose 4.1 percent and were trading 3.1 percent higher at 589.65 rupees while Ranbaxy increased about 9.9 percent before trading 1.5 percent lower at 452.50 rupees on the Bombay Stock Exchange (BSE).