Sun Pharmaceutical Shares Zoom On Buying Remaining Stake In Taro

Sun Pharmaceutical Industries Ltd shares today witnessed a rally of nearly 1.25% on BSE at 10:43 am after the company claimed on January 17, 2024 that it would buy all shares of Taro Pharmaceutical Industries for $43 per share in cash thus grabbing entire control of its unit.

Last trading price of Sun Pharmaceutical share on BSE is Rs 1315.50 per share. Sun Pharmaceutical has a market capitalisation of Rs 3,15,625.11 crore. Sun Pharmaceutical shares surged 13.88% in last 3-months.

According to the regulatory filing of the company issued today, "Further to our intimation letter dated December 12, 2023, it is hereby informed that Sun Pharmaceutical Industries Limited (together with its subsidiaries and/or affiliates referred to as "Sun Pharma"), have entered into a definitive merger agreement ("Merger Agreement") with Taro Pharmaceutical Industries Ltd. ("Taro"), pursuant to which Sun Pharma has agreed to acquire all of the outstanding ordinary shares of Taro not currently held by Sun Pharma."

The transaction is subject to approvals of the shareholders of Taro, including the majority of its minority shareholders participating in the vote, and subject to other requisite statutory approvals as per the applicable laws, added the regulatory filing of Sun Pharma.

Taro Pharmaceutical Industries Ltd., ("Target Company" or "Taro") is a multinational, science-based pharmaceutical company dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products. The consolidated revenue from operations of Taro for the FY 2022-23 was USD 572.90 million (INR 4,604.25 crores).

Acquisition of remaining outstanding shares of Taro which would result in Sun acquiring all of the public shares of Taro. With the consummation of the transaction, the combined entity will be in a position to leverage Sun Pharma's global strength and capabilities that shall pave way to better serve the needs of patients and healthcare professionals.

The cost of acquisition is USD 43/- per share amounting to USD 347.73 million for 8,086,818 shares (approximately INR 2,891.76 crores as per today's USD-INR exchange rate), added the BSE filing of Sun Pharmaceutical.

The percentage of shareholding/ control acquired and/ or number of shares acquired stand at 8,086,818 shares constituting 21.52% of the total outstanding shares of Taro.

Dilip Shanghvi, Managing Director of Sun Pharma, 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, "Taro is committed to delivering high quality products to our patients and customers around the world. This merger will further enable us compete effectively in our products and markets."

The US$43.00 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 is the world's fourth largest specialty generics company with presence in Specialty, Generics and Consumer Healthcare products. It is the largest pharmaceutical company in India and is a leading generic company in the US as well as Global Emerging Markets. Sun's high growth Global Specialty portfolio spans innovative products in dermatology, ophthalmology, and onco-dermatology and accounts for over 16% of company sales. The company's vertically integrated operations deliver high-quality medicines, trusted by physicians and consumers in over 100 countries. Its manufacturing facilities are spread across six continents.