Sun Pharmaceutical Industries Ltd and Taro Pharmaceutical Industries Ltd have entered into a definitive merger agreement in which Sun Pharma, Taro’s controlling shareholder, would acquire all of the outstanding ordinary shares of Taro other than the shares already held by it (Sun Pharma) or its affiliates for US$43 per share in cash without interest.
The total cost of acquisition of 80,86,818 shares constituting 21.52% of the total outstanding shares of Taro amounts to US$ 347.73 million (₹2,892 crore), Sun Pharma said in a filing with stock exchanges.
Dilip Shanghvi, Managing Director, Sun Pharma, in a statement said, “Over the years, with Sun Pharma’s strategic interventions, Taro has remained a key player in the generic dermatology market in a challenging environment. Post completion of the merger, the combined entity will firmly move forward, leveraging its global strengths and capabilities to better serve the needs of patients and healthcare professionals.”
Uday Baldota, Chief Executive Officer of Taro, said, “This merger will further enable us compete effectively in our products and markets.”
The US$43 per share purchase price represents a 48% premium over the closing price of US$28.97 per share on May 25, 2023, the last trading day before Sun Pharma first submitted its non-binding proposal to Taro, and a premium of 58% to the volume-weighted average price of the shares during the 60 days prior to and including May 25, 2023.
The purchase price also represents a 13% increase over the initial proposed purchase price of US$38.00 per share as proposed on May 26, 2023, Sun Pharma said.
The merger agreement was unanimously recommended by the Special Committee, which was formed by Taro’s Board of Directors to consider Sun Pharma’s proposal, it added.
The merger is subject to various closing conditions.
Upon completion of the merger, currently expected to close in the first half of 2024, Taro will become a privately held company and its shares will no longer be listed on the NYSE..
