Nearly two decades in the making, the companies expect to close the deal in the first half of 2024, after which Taro Pharmaceutical will become a privately held entity and will no longer trade on the New York Stock Exchange.
Pictured: Businessmen in suits shaking hands after closing a deal/iStock, AmnajKhetsamtip
India’s Sun Pharmaceutical Industries on Thursday agreed to buy all outstanding shares of Taro Pharmaceutical Industries for $43 a pop, completing its takeover of the Israeli drugmaker that was nearly two decades in the making.
According to the announcement, the per-share purchase price represents a 48% premium to Taro’s closing price on May 25, 2023, which is the last trading day before Sun Pharma first filed its non-binding proposal to acquire Taro.
Per Reuters’ tally, the merger is worth about $347.8 million in total.
“Taro has remained a key player in the generic dermatology market in a challenging environment,” Dilip Shanghvi, Sun Pharma managing director, said in a statement, adding that after the merger has been completed the combined company will leverage “its global strengths and capabilities to better serve the needs of patients and healthcare professionals.”
The merger was unanimously recommended by Taro’s Special Committee, which was formed by its board of directors to assess the Sun Pharma proposal. Sun Pharma’s board of directors has also unanimously signed off on the acquisition agreement.
The companies expect to close the deal in the first half of 2024, pending shareholder support, regulatory clearance and other customary conditions, after which Taro will become a privately held entity and will no longer trade on the New York Stock Exchange.
Sun Pharma first moved to acquire Taro in May 2007, at the time offering $454 million or $7.75 per share. In May 2008, Taro announced that its board of directors unanimously rejected the deal and voted to terminate the merger agreement with Sun Pharma, noting the Indian company’s offer was not in the company’s best interests, according to a news release at the time.
Taro’s board said that the deal “had become stale” and that Sun Pharma’s offer “does not reflect the dramatic operational and financial turnaround” that Taro had demonstrated at the time, as well as its “future value.”
Sun Pharma raised its offer to $10.25 per share but that was deemed “financially inadequate” by Taro’s board.
In 2012, Sun Pharma again positioned to take over Taro, putting forward $571 million—or $39.50 per-share—to buy 77.5% of the Israeli company. The deal was nixed in February 2013.
Sun Pharma revived its efforts to buy Taro in May 2023, initially offering a per-share purchase price of $38, according to Thursday’s announcement.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
