Upon completion of the merger, expected to be completed in the first half of this year, Taro will become a privately held entity and its shares will be delisted from the New York Stock Exchange
Sun Pharmaceutical to buy all the shares of Taro Pharmaceutical. (Credit: naor eliyahu from Pixabay)
India’s Sun Pharmaceutical has entered a definitive merger agreement to buy all the shares of Taro Pharmaceutical which are not already held by it or its affiliates for about $348m.
Sun Pharma will acquire Taro’s shares for $43 per share in cash without interest, thus gaining full control over it.
The Indian pharmaceutical company, which currently has a 78.5% stake in Taro, had initially proposed to purchase the remaining stake at $38 per share in May 2023.
The purchase price of $43.00 per share represents a 48% premium over the closing price of $28.97 per share on 25 May 2023, the final trading day before Sun Pharma first submitted its non-binding proposal to Taro.
It also shows a 58% premium over the volume-weighted average price of the shares during the 60 days leading up to and including 25 May 2023
Sun Pharma managing director Dilip Shanghvi 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.”
The Special Committee, appointed by Taro’s Board of Directors to review Sun Pharma’s proposal, unanimously supported the merger agreement.
The committee concluded that the merger consideration per share and the merger agreement are reasonable and in Taro’s and its minority shareholders’ best interests.
It was unanimously authorised by Taro’s Board and the Sun Pharma Board of Directors following unanimous approval by Taro’s Audit Committee and the Special Committee’s unanimous recommendation.
Upon completion of the merger, Taro will become a privately held entity and its shares will be delisted from the New York Stock Exchange.
Taro CEO Uday Baldota 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.”
The transaction is expected to close in the first half of this year, subject to several closing conditions.