Sun Pharmaceutical has signed a definitive merger agreement for the acquisition of all outstanding ordinary shares of Taro Pharmaceutical not currently owned by the company or its affiliates for $347.73m (Rs28.92bn) in cash.

The acquisition price is $43 per share in cash without interest for 8,086,818 shares, which represent 21.52% of the total outstanding Taro shares.

In an intimation letter published on 12 December 2023, Sun Pharma expressed interest in a takeover of Taro.

Taro focuses on developing off-patent pharmaceuticals. It supplies a variety of prescription and over-the-counter products such as tablets, capsules and topical formulations to markets including the US, Canada and Israel.

The merger was recommended by a special committee comprising directors of Taro, after thorough analysis and consultation with financial and legal advisors.

They deemed the deal and the share valuation fair and in the best interests of Taro as well as the minority shareholders of the company.

The boards of both companies have granted unanimous approval for the merger.

Sun Pharma managing director Dilip Shanghvi stated: “Over the years, with Sun Pharma's strategic interventions, Taro has remained a key player in the generic dermatology market in a challenging environment.

“Post completion of the merger, the combined entity will firmly move forward, leveraging its global strengths and capabilities to better serve the needs of patients and healthcare professionals.”

The merger will conclude in the first half of 2024.

Taro will become a privately held entity within the Sun Pharma group.

Taro Pharmaceutical CEO Uday Baldota stated: “Taro is committed to delivering high-quality products to our patients and customers around the world. This merger will further enable us compete effectively in our products and markets.”