Shares of Sun Pharmaceutical Industries Ltd surged 1.44% to ₹1,314.80 early today, after the company announced the acquisition of all the outstanding shares of Taro Pharmaceutical Industries, marking conclusion to a 17-year legal battle.

The pharma giant, in an exchange filing, announced to acquire all outstanding shares of Taro Pharmaceutical Industries at $43 per share, amounting to $347.73 million, securing complete control over its subsidiary. Currently, it holds a 78.5% stake in Taro. It had proposed the purchase of the remaining 21.52% of the total outstanding shares of Taro at $38 per share in May.

The transaction marks the conclusion of nearly 17-year effort to gain full control of the U.S.-listed generic drugmaker, which primarily operates in the United States and Canada.

“The US$43.00 per share purchase price represents a 48% premium over the closing price of US$28.97 per share on May 25, 2023, the last trading day before Sun Pharma first submitted its non-binding proposal to Taro, and a premium of 58% to the volume-weighted average price of the shares during the 60 days prior to and including May 25, 2023. The purchase price also represents a 13% increase over the initial proposed purchase price of US$38.00 per share as proposed on May 26, 2023,” the pharma giant says.

Earlier, the pharma major had struck a deal to acquire the financially challenged Taro for a sum of $454 million. Additionally, Sun Pharma committed to infuse a prompt $45 million in interim equity financing to Taro, securing 7.5 million of the company's ordinary shares.

Nevertheless, in the ensuing period, Taro has consistently thwarted Sun Pharma's endeavours to finalise its rights to attain a controlling stake in the Israeli firm. A pivotal moment in the protracted battle occurred when the Israeli Supreme Court, in a unanimous decision, rejected Taro's appeal to prevent Sun Pharma from augmenting its ownership stake.

“The consolidated revenue from operations of Taro for the FY 2022-23 was USD 572.90 million (INR 4,604.25 crores),” the filing states.

Upon the merger's anticipated completion in the first half of the year, Taro is slated to become a privately held entity, prompting its delisting from the New York Stock Exchange (NYSE), the filing adds.

Sun Pharma Taro deal

Sun Pharma buys outstanding stake in Taro for ₹2,891 cr