Mumbai based Sun Pharmaceutical has finally dropped the idea of merging Israeli drug unit Taro with itself following some conflicts over profit sharing with some minority shareholders of the NYSE listed firm.
The decision to terminate the merger agreement was taken on Friday. The two companies had decided in last August to merge as Sun already held 66.5 per cent stake in Taro.
Sun, which had signed the deal to buy Taro for USD 454 million in May 2007, was facing disagreement from at least two shareholders of Taro — Raging Capital and Grand Slam — who raised objections on the deal value.
Sun Pharma also tried to woo the minority shareholders of Taro by offering cash payment of USD 39.50, upon the close of the merger deal in exchange for a Taro share.
However, the offer didn't yield any result as Taro's shares are now traded at USD 50.5 on the NYSE, about 28 per cent higher than Sun's current offer of USD 39.5.