Taro stake buyout to help operate its dermatology biz profitably amid enhanced competition: Sun Pharma
Sun Pharma is looking to fully acquire its Israel-based unit Taro Pharmaceutical Industries in order to integrate the dermatology business with itself and keep it profitable amid increasing competition in the segment, according to Managing Director Dilip Shanghvi. The Mumbai-based drug major has proposed to fully acquire Taro through a reverse triangular merger.
The company has issued a letter to the Taro board with a proposal containing a non-binding indication of interest to acquire all of the outstanding ordinary shares for a purchase price of USD 38 per ordinary share in cash.
Sun Pharma currently owns around 78 per cent stake in Taro.
«My own assessment is that the dermatology business, which is the primary focus for Taro, is a business under constant, increasing competition pressure,» Shanghvi said in an analyst call. He further said: «And as a stand-alone company, it will be very difficult for Taro as an independent company to continue to operate that business profitably. So that broadly is the reason why we felt that it's useful for us to consider integrating that with Sun Pharma.»
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Shanghvi was replying to a query on the reasons why Sun Pharma is looking to acquire the remaining stake in the Israel-based drug firm.
«We've made a proposal to the Taro Board. And the Taro Board, as a response to our proposal, has formed a special committee. They need to finalise the lawyers and bankers and all of that, that special committee. And then, at some point, the negotiation
