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MUMBAI:
India’s biggest drug maker Sun Pharma has offered to acquire the outstanding shareholding in its US subsidiary, Taro Pharma for around $300 million through a reverse triangular merger.
In the all cash deal, Sun Pharma will acquire the shares at a price of US $38 per ordinary share, which will be payable in full at the close of the proposed transaction, the company said in a BSE filing on Saturday. At present, Sun holds 78.48% stake in Taro.
In another development, Aalok Shanghvi, son of the company’s promoter and MD, Dilip Shanghvi is joining the company’s board as director. The company’s board appointed him as a whole-time director for a term of five years effective from June 1, 2023. Aalok is at present the company’s executive VP and head of emerging markets, global generic R&D, global generic business development and API.
Aalok joined the company in 2006 and has handled various roles in marketing, R&D, project management, purchase and communications. He has done his undergraduate majoring in Cellular and Molecular Biology from the University of Michigan – Ann Arbor.
Further, the filing said, “We believe that the proposed transaction provides a compelling liquidity opportunity for the company’s shareholders and will benefit the company and its stakeholders”.
The proposed price represents a premium of 31.2% over Taro’s closing price on May 25, a 41.5% premium over Taro’s average closing price in the last 60 days, Sun Pharma said in its filing to the exchanges.
After the completion of the deal, Sun Pharma will hold 100% of the outstanding share capital of Taro on a fully diluted basis. “We envisage the proposed transaction to be consummated in the form of a reverse triangular merger under the Israeli Companies Law, 1999 and practice. In this context, the purchaser shall form a wholly owned subsidiary (SPV), which shall enter into a merger agreement with Taro, with the SPV merging with and into Taro, and Taro surviving the merger transaction. Consequently, Taro shall become a wholly-owned subsidiary of purchaser and be delisted from NYSE. As this is a common practice in Israel, we believe that such a transaction structure would benefit all stakeholders and may be performed in a swift and certain manner”, it added.
It also announced the appointment of Rolf Hoffmann as an independent director for five years. Hoffmann is a strategic and results-orientated executive.
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