How a friendly outbound acquisition by Sun Pharmaceutical descended into a hostile takeover war
In May 2007, Mumbai-based Sun Pharmaceutical signed an agreement to acquire Israel’s Taro Pharmaceutical, a generics manufacturer with operations in the US, Canada and Israel, for US$454 million in an all-cash deal. The Indian company intended to use the acquisition as a springboard for global expansion, building on Taro’s expertise in dermatology, paediatrics, specialty pharmaceuticals and over-the-counter products.
Reverse triangular structure
Under the terms of the agreement, Sun was to acquire 50-year-old Taro by paying US$230 million in cash at the rate of US$7.75 per share. This was a 27% premium on Taro’s prevailing share price. Sun also agreed to repay Taro’s debts of US$224 million.
Sun and Taro both had subsidiaries at the time of the deal. Sun was the parent company of Sun Pharma USA and Hungary-based Alkaloida Chemical Company. Taro, meanwhile, owned subsidiaries in Canada and the US.
You must be a
subscribersubscribersubscribersubscriber
to read this content, please
subscribesubscribesubscribesubscribe
today.
For group subscribers, please click here to access.
Interested in group subscription? Please contact us.