Once consummated, the merger would create India's largest and world's fifth-biggest drug maker. In a statement, the Federal Trade Commission on Friday said that following a "public comment period", it has approved a final order settling charges that the Sun Pharma-Ranbaxy deal would likely be anti-competitive.
As per the first order issued by FTC in January this year, Sun Pharma was required to divest Ranbaxy's interests in generic minocycline tablets to Torrent Pharmaceuticals, based in India.
Torrent Pharma markets generic drugs in the US. "Sun must also sell Ranbaxy's generic minocycline capsules to Torrent to enable Torrent to obtain regulatory approval for its tablets as quickly as Ranbaxy would have absent the deal," the release said.
In January, FTC had said that to address monopoly concerns, Sun Pharma and Ranbaxy have agreed to divest the latter's interests in generic minocycline tablets.
Generic minocycline tablets are used to treat a wide array of bacterial infections, including pneumonia, acne, and urinary tract infections.
Under the proposed settlement, Ranbaxy's generic minocycline capsule assets was to be acquired by Torrent Pharma.
In addition, Sun and Ranbaxy must supply generic minocycline tablets and capsules to Torrent until the company establishes its own manufacturing infrastructure, the first order had said.
"The proposed consent agreement effectively remedies the proposed acquisition's anti-competitive effects in relevant markets," FTC had said in January.
"Pursuant to the consent agreement and the order, the parties are required to divest all of Ranbaxy's rights and assets to generic minocycline tablets to Torrent," it had said.
India's fair trade watchdog CCI, in last December, had directed both companies to divest seven products as it found that the deal could hit competition in the Indian market.