Indian pharma giant Sun Pharma has offered to acquire the shares of Taro Pharmaceutical Industries that it does not already own for $38 apiece via a reverse triangular merger, a press release by the company stated on May 27.

Taro has appointed a special committee to review the proposal. The proposed amount, which is to be paid in full upon the conclusion of the proposed acquisition, represents a nearly 30% premium over Taro’s closing price on May 26, 2023. Sun Pharma presently owns 78.48% of Taro.

Sun Pharma will acquire all outstanding stock of Taro owning 100% of Taro shares following the proposed all-cash transaction. Consequently, Taro will become a wholly owned subsidiary of Sun Pharma and get de-listed from New York Stock Exchange. 

A filing by Sun Pharma in the stock exchanges stated, “We envisage the Proposed Transaction to be consummated in the form of a reverse triangular merger under the Israeli Companies Law, 1999 (“ICL”) and practice.”

Sun Pharma’s management and board of directors must be consulted for final approval by the company, which is subject to several conditions, including but not limited to the execution and delivery of binding contracts; approval of all governing bodies; receipt of any third-party approvals, if necessary; and receipt of applicable regulatory approvals. For the agreement to be successful, it must be completely implemented.

On May 26, the firm reported its Q4FY23 results, posting a consolidated net profit of Rs 1,984 crore, compared to a net loss of Rs 2,277 crore in the same time the previous year. The pharma major’s revenue from operations for the January-March quarter was Rs 10,930.6 crore, a 15.7% increase over the previous year’s figure of Rs 9,446.8 crore.