Sun Pharma Acquired Taro in an All-cash-deal

Sun Pharma, a leading pharmaceutical company in India and the fourth largest specialty generic pharmaceutical company globally, sent a letter to Taro Pharmaceutical Industries, one of Israel’s prominent pharmaceutical companies and the leading generic dermatological company in the US. The letter included a non-binding indication of interest, proposing to acquire all Taro’s ordinary shares.

Related Article: Taro Pharma Acquires Alchemee from Galderma

10-Year War between Sun Pharma and Taro Pharma

In 2010, Sun Pharma acquired a controlling stake of 69% in Taro Pharmaceuticals, headquartered in Haifa, Israel. Since Taro Pharmaceuticals had a strong market presence in the US, the company aims to establish a stronger foothold in the US market.

In October 2011, the Indian pharma giant proposed to purchase all the shares of the Israeli firm; however, Taro’s board rejected its offer in July 2012, due to the inadequate price. And then the next month, Taro’s board agreed to sell the remaining company stake and affiliates for an enhanced price of $39.50 per share. In November, the meeting of Taro shareholders, which was scheduled for December 6, 2012, to discuss the proposed merger with Sun Pharma, was postponed by Taro without reason. Therefore, Sun Pharma failed to fully-acquired Taro in 2013. Until May 26, 2023, everything had changed.

Taro Becomes a Fully-owned and Delisted from NYSE

In compliance with the Israeli Companies Law, 1999 (ICL), the proposed transaction will be executed as a reverse triangular merger. This structure entails Sun Pharma forming a wholly-owned subsidiary of SPV to enter into a merger agreement with Taro, ensuring the completion of the all-cash deal. The company will purchase the ordinary shares at $38 per share under the proposed transaction. The full payment for the shares will be made upon closing of the deal. Consequently, Taro will be acquired by Sun Pharma and become a fully-owned subsidiary, leading to Taro’s delisting from the New York Stock Exchange (NYSE).

In addition to gaining ownership of the leading generic dermatological company in the US, the merger and acquisition of the two companies also bring benefits to all stakeholders of Taro, ensuring a swift and certain process.

Author

Sinead Huang