Sun Pharma bolsters dermatology portfolio with Taro acquisition

INDIA – Sun Pharma has deepened its presence in the dermatology space with the acquisition of Taro Pharmaceutical Industries Ltd., an Israeli research-based pharmaceutical manufacturer.

This acquisition, valued at US$348 million, will benefit Sun Pharma and all of its shareholders while providing a compelling liquidity opportunity for the company’s shareholders.

This merger also forms a perfect synergy between the two pharma giants to deliver innovative solutions for the Indian market, promising a better future in the dermatology landscape in the country.

In a press release, 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 to compete effectively in our products and markets.”

As part of the newly signed agreement, Sun Pharma has agreed to acquire all of the outstanding ordinary shares of Taro, excluding the shares already held by Sun Pharma or its affiliates, for US$43.00 per share in cash without interest.

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.

In addition, the purchase price represents a 13% increase over the initial proposed purchase price of US$38.00 per share as proposed on May 26, 2023.

It is important to note that 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.

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 New York Stock Exchange (NYSE).

On the merger agreement, Dilip Shanghvi, Managing Director of Sun Pharma, underscored: “Over the years, with Sun Pharma’s strategic interventions, Taro has remained a key player in the generic dermatology market in a challenging environment.”

Through the landmark deal, Sun Pharma has agreed to vote its shares in favor of the merger and has indicated that it is not willing to sell its shares to a third party or support any alternative transaction to the merger.

It builds on the Indian drugmaker’s mission to establish itself as a preferred development and commercial partner in dermatology and ophthalmology therapies worldwide.

Additionally, it marks the conclusion of the company’s efforts to secure full ownership of Taro, which predominantly operates in the United States and Canada.

The Taro acquisition is anticipated to complement and enhance the company’s existing dermatology franchise, which provides patient solutions across a broad spectrum of skin conditions in various disease stages.

Moreover, this definitive merger agreement follows a comprehensive evaluation of the proposal with assistance from independent financial and legal advisors.

The Special Committee determined that the merger agreement and the per share merger consideration are fair and in the best interests of Taro and its minority shareholders.

Taro’s Board and the Board of Directors of Sun Pharma unanimously approved the definitive merger agreement upon receiving the unanimous recommendation of the Special Committee and following unanimous approval by Taro’s Audit Committee.

For his part, Dilip Shanghvi said: “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.”

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