Sun Pharmaceutical Industries will acquire Organon for $11.75 billion

Sun Pharmaceutical Industries announces the acquisition of US-based Organon & Co and thus doubles its revenues and EBITDA. India's largest group by market capitalisation, in an all-cash deal worth around USD 11.75 billion, including debt, makes the largest foreign acquisition ever completed by an Indian pharmaceutical company.

Sun Pharma, with a capitalisation of more than $40 billion, will pay $14 per share, a premium of more than 24% over the closing price on 24 April. The transaction will be financed through cash and committed bank lines.

The deal marks an acceleration in Sun Pharma's strategy to develop higher-margin specialty drugs. The group intends to strengthen its presence in the dermatology, oncology and obesity segments, in an attempt to offset weak sales in the US market. The regulatory and pricing environment in the US, which is increasingly challenging for Indian pharmaceutical companies with the greatest exposure to the US market, has prompted Sun to also keep open the option of strengthening local production capacity.

The deal also allows Sun Pharma to expand its geographic scope, with access to emerging markets such as China and Brazil, and to strengthen its portfolio in women's health, while entering the biosimilars segment.With the integration of Organon, the Indian group will acquire a portfolio of more than 70 products dedicated to women's health and generic drugs, distributed in around 140 countries, thus consolidating its transformation into a global player in branded and speciality drugs.

According to analysts, the deal has positive industrial and financial elements, although it does not significantly alter Sun's competitive position in the US, where Organon's presence is considered limited.