SHANGHAI, CHINA – NOVEMBER 05: People visit the Organon booth during the 7th China International Import Expo (CIIE) at the National Exhibition and Convention Center (Shanghai) on November 5, 2024 in Shanghai, China. The 7th China International Import Expo (CIIE) kicked off in Shanghai on November 5. (Photo by Tang Yanjun/China News Service/VCG via Getty Images)
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Shares in Sun Pharmaceutical Industries rose 5% on Monday, after India’s largest drugmaker announced it would buy New Jersey-based Organon & Co in an all-cash deal that values the US company at $11.75 billion, including debt.
The company will acquire all outstanding shares of Organon for $14 each, according to the exchange posted by Sun Pharmaceutical.
“After a thorough review of strategic alternatives, our Board has determined that this all-cash purchase provides compelling and immediate value to Organon’s shareholders,” said Carrie Cox, executive chairman at Organon, in a joint statement.
Organonwhich was released from Merck in 2021, is mainly focused on women’s health and biosimilars and has more than 70 products sold in 140 countries.
The acquisition will help boost Sun Pharma, a generics company, into the top 25 pharmaceutical companies in the world, with revenue of $12.4 billion, according to a joint statement. According to LSEG data, Sun Pharma’s market value stands at more than $41 billion as of Friday.
“This transaction is the next logical step in strengthening Sun Pharma’s business,” said Kirti Ganorkar, managing director of Sun Pharma. The purchase of Organon will help the Indian company to diversify its pharmaceutical products, as the US is an important market.
The purchase of Organon is part of Sun Pharmaceutical’s strategy to “grow its Innovative Medicines business,” the Indian company said in a statement. According to the European Medicines Agency, an innovative medicine contains an active substance or a combination of active substances that has not been previously approved.
Sun Pharma’s new drug products currently include dermatology, ophthalmology, and onco-dermatology.
In the fiscal year ending March 2025, Sun Pharma’s new drugs segment accounted for 20% of its total sales, but with its acquisition, it will contribute 27% higher, according to the statement.
“Organon’s portfolio, capabilities and global reach are highly complementary to ours,” Dilip Shanghvi, executive chairman of Sun Pharma, said in the release.
Organon’s key markets are the US, Europe, China, Canada, and Brazil, supported by six manufacturing facilities across the European Union and emerging markets.
Organon shares rose nearly 31% on Friday after India’s Economic Times newspaper reported, citing sources, that Sun Pharma was buying Organon for about $13 billion.
