Sun Pharma to fully acquire subsidiary Taro Pharma for Rs 2,892 crore; shares rise

Sun Pharmaceutical Industries (SUNPHARMA) shares rose on Thursday, bucking the market-wide weakness on Dalal Street, after the Mumbai-headquartered drug maker said it will raise its stake in its subsidiary Taro Pharma to 100 per cent. The stock of Sun Pharma gained by as much as Rs 25.2, or 1.9 per cent, to Rs 1,324.5 apiece on BSE, coming within Rs 16 of an all-time high touched this week. Sun Pharma already owns a 78.48 per cent stake in Taro Pharma.

In a regulatory filing early on Thursday, Sun Pharma said the acquisition cost stood at $43 per share, amounting to $347.7 million (approximately Rs 2,891.8 crore) in an all-cash deal. It said the transaction will enable the combined entity to leverage Sun Pharma’s global strength and capabilities.

The acquisition, subject to statutory and other necessary approvals, will be completed in the financial year ending March 2025, the company said.

Taro registered consolidated revenue from operations to the tune of $572.9 million (Rs 4,604.3 crore) for the financial year 2022-23, it added.

Taro Pharmaceutical Industries (TARO) shares ended 0.6 per cent higher in the US on Thursday.

What does Taro Pharma do?

Listed on the New York Stock Exchange (NYSE), Taro Pharma is a multinational, science-based pharmaceutical company dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products, Sun Pharma said.

Taro develops high-quality, proprietary and off-patent pharmaceuticals for markets in the US, Canada, Israel and other countries around the world, and produces a wide range of prescription and over-the counter (OTC) products including tablets, capsules, suspensions, solutions, creams and ointments.

On Thursday, Sun Pharma shares ended weaker by Rs 14.3, or 1.1 per cent, at Rs 1,299.3 apiece.

During the market hours that day, the company said it had signed a marketing and distribution deal with Bayer for a second brand of Finerenone in India. Finerenone, a patented medicine, is indicated to reduce the risk of sustained eGFR decline, end-stage kidney disease, cardiovascular death, non-fatal myocardial infarction, and hospitalisation for heart failure in adult patients with chronic kidney disease associated with type 2 diabetes mellitus, Sun Pharma said.

As part of the agreement, Bayer granted the non-exclusive rights to Sun Pharma to market and distribute the second brand under the brand name Lyvelsa.

With inputs from agencies