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Sun Pharmaceutical Industries Ltd announced Monday that it has signed a definitive agreement to acquire Organon & Co. for $14.00 per share in an all-cash transaction, valuing the US-based healthcare company at an enterprise valuation of $11.75 billion.
Shares of Sun Pharma jumped over 7 per cent to Rs 1,737.20 after the company disclosed information about the acquisition and it was the top gainer in the Nifty 50 index during Monday's trading session. The acquisition will see Sun Pharma combine its portfolio with Organon's to create a stronger player in established brands and branded generics, while also marking its entry into biosimilars as a top-10 global player. The deal is expected to close in early 2027, subject to regulatory and shareholder approvals. Organon, spun off from Merck in 2021, is a global leader in women's health with a portfolio of more than 70 products across women's health and general medicines, including biosimilars, commercialised in 140 countries. It operates six manufacturing facilities across the EU and emerging markets, with the US, Europe, China, Canada and Brazil among its largest markets. The combined entity will position Sun Pharma among the top 25 global pharmaceutical companies with combined revenue of $12.4 billion, based on FY24-25 for Sun Pharma and CY2025 for Organon. It will also become a top-3 company in global women's health and the 7th largest global biosimilar player, with a presence in 150 countries and 18 large markets each generating over $100 million in revenue. "This transaction represents a significant opportunity for Sun Pharma to build on its vision of Reaching People and Touching Lives," said Dilip Shanghvi, Executive Chairman of Sun Pharma. "Organon's portfolio, capabilities and global reach are highly complementary to our own, and we believe that bringing the two organizations together can create a stronger and more diversified platform." Kirti Ganorkar, Managing Director of Sun Pharma, said the acquisition is a "logical next step in strengthening Sun Pharma's global business." He added, "Together, we will become a partner of choice for acquiring and launching new products. Our immediate priorities will be business continuity, disciplined integration and responsible value creation." Ganorkar noted there is scope for synergies, including significant revenue upside over the coming years. The deal also enhances Sun Pharma's innovation focus, with 27% of revenue coming from innovative medicines post-completion. The company expects EBITDA and cash flow to nearly double, supporting deleveraging from a post-transaction Net Debt/EBITDA of 2.3x. For the year ended December 31, 2025, Organon reported $6.2 billion in revenue and $1.9 billion in adjusted EBITDA, with debt of $8.6 billion and a cash balance of $574 million. Carrie Cox, Executive Chair of Organon, said the all-cash transaction offers "compelling and immediate value to Organon stockholders" following a comprehensive review of strategic alternatives. "We believe Sun Pharma is well positioned to support Organon's businesses, employees and patients globally, and to further advance our commitment to delivering impactful medicines and solutions," she said. Sun Pharma plans to fund the acquisition through a mix of available cash and committed bank financing. The transaction will be effected through a merger, with Organon surviving as a subsidiary of Sun Pharma. (ANI)
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