Sun Pharma offers to acquire 100% stake in Taro in an all-cash deal

Sun Pharmaceutical Industries has proposed acquisition of all the shares of Taro Pharmaceutical Industries by way of reverse triangular merger. In the all cash deal, Sun Pharma will acquire the shares at a price of US $38 per ordinary share which will be payable in full at the closing of the proposed transaction.

The proposed price represents a premium of 31.2% over Taro's closing price on May 25, 2023, a 41.5% premium over Taro's average closing price in the last 60 days, Sun Pharma said in its filing to the exchanges.

The proposed acquisition does not include shares held by Sun Pharma and its affiliates. After the completion of the deal, Sun Pharma will have a 100% holding in the company.

The all-cash transaction will be consummated in the form of a reverse triangular merger under the Israeli Companies Law, 1999 (ICL) where Sun Pharma will be required to form a wholly owned subsidiary or SPV which will enter into a merger agreement with Taro.

Under the indicative proposal, post the acquisition, Taro will become a wholly owned subsidiary of Sun Pharma and will be delisted from NYSE.

"We believe that the Proposed Transaction provides a compelling liquidity opportunity for the Company's shareholders and will benefit the Company and all of its stakeholders," the company said in its filing to the exchanges.

The company has not given any timeline for the completion of the proposed acquisition.

The company has to seek a final approval from the Sun Pharma's management and Board of Directors.

The deal will require fulfillment of binding contractual documentation, approval of all the governing bodies, including the shareholders of Taro and third-party approvals, if needed.

Sun Pharmaceuticals on Friday reported a consolidated net profit of Rs 1,984.47 crore for the quarter ended March 31, 2023, against a loss of Rs 2,277.25 crore in the same period last year. The profit was, however, lower sequentially as it stood at Rs 2,166.01 crore in Q3FY23.

The revenue for the reporting quarter came in at Rs 10,726 crore, up 12% year-on-year (YoY) as against Rs 9,560 crore in Q4FY22.

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