January 18, 2024 Mumbai-based Sun Pharmaceutical Industries Limited announced on Wednesday its plans to acquire the remaining shares of Taro Pharmaceutical Industries, solidifying its control over the U.S.-listed generic drugmaker. The deal, valued at approximately $347.8 million, will see Sun Pharma purchasing all outstanding shares of Taro for $43 per share in cash.
This move follows Sun Pharma’s existing ownership of about 78.5% stake in Taro. The per-share offer of $43 represents a 4.2% premium over Taro’s closing price on Wednesday. It marks the culmination of nearly 17 years of negotiations and attempts by Sun Pharma to gain complete control of Taro, which predominantly operates in the United States and Canada.
Sun Pharma had previously made an offer in May to acquire the remaining stake at $38 per share, and the latest offer reflects an increased valuation, underscoring the strategic importance of acquiring full ownership. The deal is expected to close in the first half of the year, resulting in Taro becoming a privately held company and subsequently being delisted from the New York Stock Exchange.
The acquisition is a significant development in the pharmaceutical industry, allowing Sun Pharma to consolidate its presence and streamline operations within the generic drug market, particularly in North America.
The completion of the merger will mark the end of Taro’s public trading on the NYSE, transitioning to a privately held entity under the umbrella of Sun Pharma. The move is anticipated to enhance operational efficiency and flexibility for both companies in navigating the dynamic pharmaceutical landscape.
It is noteworthy that the U.S. government had dismissed charges against a former Taro executive in November, who was accused of conspiring to fix generic drug prices between 2013 and 2015. Taro had previously agreed to a settlement of over $200 million in July 2020 to resolve criminal price-fixing allegations, as part of a broader crackdown by the Justice Department on pricing abuses in the generic drug market.
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