Sun Pharmaceutical Industries Limited and Taro Pharmaceutical Industries recently announced that they have entered into a definitive merger agreement in which Sun Pharma, Taro’s controlling shareholder, has agreed to acquire all of the outstanding ordinary shares of Taro other than the shares already held by Sun Pharma or its affiliates for US$43 per share in cash without interest.
The US$43 per share purchase price represents a 48% premium over the closing price of US$28.97 per share on May 25, 2023, the last trading day before Sun Pharma first submitted its non-binding proposal to Taro, and a premium of 58% to the volume-weighted average price of the shares during the 60 days before and including May 25, 2023. The purchase price also represents a 13% increase over the initial proposed purchase price of US$38.00 per share, as proposed on May 26, 2023.
This merger agreement was unanimously recommended by the Special Committee, which was formed by Taro’s Board of Directors to consider Sun Pharma’s proposal. And following a comprehensive evaluation of the proposal with assistance from independent financial and legal advisors, the Special Committee determined that the merger agreement and the per share merger consideration are fair and in the best interests of Taro and its minority shareholders.
Upon receiving the unanimous recommendation of the Special Committee and following unanimous approval by Taro’s Audit Committee, Taro’s Board and the Board of Directors of Sun Pharma unanimously approved the definitive merger agreement.
This merger is subject to various closing conditions including the approval of the merger by the affirmative vote of shareholders representing at least 75% of the voting power of the company’s shares present and voting in person or by proxy at a meeting of the company’s shareholders
Upon the completion of the merger, currently expected to close in the first half of 2024, Taro will become a privately held company, and its shares will no longer be listed on the NYSE.
The Special Committee retained BofA Securities, Inc. as its financial advisor, Goldfarb Gross Seligman & Co. as its Israeli counsel, and Skadden, Arps, Slate, Meagher & Flom LLP as its U.S. legal counsel to assist it in its mandate. Herzog, Fox & Neeman is acting as Israeli legal counsel to Sun Pharma and Davis Polk & Wardwell LLP is acting as U.S. legal counsel to Sun Pharma. Meitar is acting as Israeli legal counsel to Taro, and Shearman & Sterling LLP is acting as U.S. legal counsel to Taro.
KEY QUOTES:
“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.”
– Dilip Shanghvi, Managing Director of Sun Pharma
“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.”
– Uday Baldota, Chief Executive Officer of Taro
