Sun Pharmaceutical Industries, India’s largest drug maker by market capitalisation, on Monday announced that it has entered into an agreement to merge Israel-based drug maker Taro Pharmaceutical Industries.
As per the agreement, shareholders of Taro would receive a cash payment of $39.50 per share. Sun Pharma, which owns 66% of Taro, will need to pay around $571 million (Rs 3,156 crore) to buy about a third of Taro’s 44.5 million shares at $39.50 a share.The announcement ends around two-year long legal battle between the two companies over the acquisition of the remaining shares of Taro. Sun Pharma had acquired a controlling stake in Taro in September, 2010.
Sun Pharma was able to close the merger deal by raising the offer by 61% from its earlier offer of $24.50 a share that was rejected by Israeli unit last month on the grounds that it was inadequate.
“The merger agreement was approved by Taro’s board of directors based upon the recommendations and approvals of the special committee of Taro’s board of directors and the audit committee of Taro’s board of directors,” Sun Pharmaceutical said in a statement.
“On completion of the merger, Taro would become a privately held company, wholly-owned by affiliates of Sun Pharma and its shares would not be traded on the New York Stock Exchange,” said the company.
Shares of Sun Pharma closed at Rs 682, up 1% on Bombay Stock Exchange on Monday.