Sun Pharma buys US-based Organon in $12bn all-cash deal

New Delhi: In its boldest move yet, Sun Pharma, India's largest pharma company, has struck the biggest-ever overseas pharma deal, acquiring US-listed Organon & Co for $11.8 billion (Rs 98,000 crore) in an all-cash transaction.

The deal broadens Sun Pharma's therapeutic breadth and geographic reach in one sweep, adding over 140 high-growth markets including China, and a portfolio around innovative therapies, including women's health, biosimilars, and legacy brands.

Sun Pharma will pay $14 per share, a premium of over 24% to Organon's last closing price on April 24 in one of the largest M&A deals by an Indian company. On Monday, Sun Pharma shares closed 7% higher at Rs 1,734 on BSE.

Once completed, the acquisition will double Sun Pharma's revenue to $12.4 billion and its EBITDA to $3.7 billion, ranking it among the top 25 global pharmaceutical companies.

Organon, spun off in 2021 from Merck (known as MSD outside US and Canada), brings portfolio of over 70 products across women's health, general medicines and biosimilars, along with six manufacturing facilities worldwide.

The deal follows Sun Pharma's proven M&A playbook from the landmark Ranbaxy acquisition in 2014 to a string of in-licensing deals, which have strengthened its innovative portfolio and delivered a 14% revenue CAGR between FY10 and FY25.

Sun chairman Dilip Shanghvi said: "We are debt-averse, but we are never risk-averse. Biosimilars is a segment where building capabilities organically would take years; Organon gives us that platform immediately.''

The deal positions Sun Pharma as the top 3 player in women's health, after German firms Merck and Bayer, and the seventh-largest biosimilars company in the world -- two of the fastest-growing segments. "Sun Pharma's proposed deal with Organon, valued around 6x EBITDA, appears financially disciplined, supported by steady cash flows," Vishal Manchanda analyst at Systematix said.

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