Shearman & Sterling and Davis Polk & Wardwell have the lead roles on Indian generic drug maker Sun Pharmaceutical Industries Ltd.’s $3.2 billion acquisition of local competitor Ranbaxy Laboratories Ltd. from Japanese pharmaceutical company Daiichi Sankyo Co.

The deal, subject to Indian regulatory approval, will create world’s fifth-largest generic drug maker, with revenue of over $4.2 billion per year.

Daiichi Sankyo acquired its 63.92 interest in Ranbaxy in 2008 for $4.6 billion. The Japanese company has been looking to exit its investment since last year, when Ranbaxy came under fire from the U.S. Food and Drug Administration, which fined the company $500 million in May over drug safety issues. In January the FDA also banned exports from two of Ranbaxy’s plants because of unsafe manufacturing practices.

Under the terms of its deal with Sun, Daiichi will own 9 percent of the merged company.

New York partners Peter Lyons and Eliza Swann are leading a Shearman & Sterling team advising Sun that also includes San Francisco partner Patrick Robbins and New York partners Richard Schwed and Jessica Delbaum. Crawford Bayley & Co. and S. H. Bathiya & Associates are acting as cocounsel on Indian law.

Davis Polk Hong Kong partner Kirtee Kapoor and New York partners David Caplan and Michael Davis are advising Daiichi and Ranbaxy, with Amarchand & Mangaldas & Suresh A. Shroff & Co. Mumbai partners Cyril Shroff and Gurpreet Vasir Ashar and Bangalore partner Nivedita Rao acting as Indian counsel. Ranbaxy is additionally being represented by Luthra & Luthra Law Offices on Indian law.

Weil, Gotshal & Manges New York partner Michael Aiello is advising Evercore Partners Inc., financial adviser to Sun.

Email: azhang@alm.com.